Microsoft and Activision Delay Deal to Settle British Regulatory Issues

Microsoft and Activision Blizzard said on Wednesday that they were delaying a $69 billion merger as the two companies scrambled to get final approval from British antitrust regulators.

The new extension, set for Oct. 18, signals that the two companies believe they will complete the deal but need more time to satisfy regulators’ concerns.

When Microsoft announced its plans to acquire the video game publisher Activision in early 2022, the two companies set a deadline of July 18 this year to close the deal. The revised agreement introduced an escalating breakup fee that Microsoft would have to pay to Activision if the purchase fell through, from $3 billion until Aug. 29, then growing to as much as $4.5 billion if it does not close by Sept. 15.

“We are confident about our prospects for getting this deal across the finish line,” Brad Smith, Microsoft’s president, wrote on Twitter.

“While we continue to have concerns about the economy and growing industry competition, we remain focused on the long-term opportunities ahead and completing our merger with Microsoft,” Bobby Kotick, chief executive of Activision, said in a statement.

The antitrust scrutiny has focused on whether consumers will be harmed if Microsoft, which makes the Xbox video game console and has a nascent game streaming platform, also owns the game publisher behind blockbusters like Call of Duty.

Three regulators ended up being the most crucial gatekeepers to the acquisition. The deal received a green light from the European Union in May after Microsoft agreed to offer Activision games on other streaming platforms. But it faced bigger opposition in the United States and Britain.

In December, the Federal Trade Commission sued to oppose the acquisition in the agency’s administrative court, arguing Microsoft could keep Call of Duty off Sony’s popular PlayStation console. And in June, the F.T.C. asked a federal judge to postpone the deal while the administrative process proceeded. That judge ruled against the F.T.C. last week, and an appeals court on Friday rejected the agency’s request to stop the deal from closing.

The British antitrust regulator, the Competition and Markets Authority, moved to block the deal in April, saying it could harm consumers who streamed games online. Microsoft and Activision appealed the finding.

Last week, shortly after the federal judge rejected the F.T.C.’s attempt to block the deal, Microsoft, Activision and the British antitrust regulator said they wanted to pause the appeal proceedings to see if they could negotiate an arrangement that resolved regulatory concerns. On Monday, the regulator told the tribunal handling the appeal that there was a “realistic chance” the talks would be successful. The tribunal granted a two-month pause in the appeal.

On Sunday, Microsoft also said it had reached a deal with Sony to keep Call of Duty on PlayStation for 10 years, which resolved the biggest concern the F.T.C. raised in court. Typically, the F.T.C. withdraws its administrative case if it loses in federal court, but it has not yet backed away from its objections to Microsoft’s acquisition plans.

Adam Satariano contributed reporting.

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