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posted by janrinok on Tuesday January 17 2023, @02:05PM   Printer-friendly

The FTC has scheduled a hearing for August 2, well after the deal is supposed to close:

The US Federal Trade Commission (FTC) has thrown a monkey wrench into Microsoft's plan to acquire Activision. According to a scheduling order filed last week, the FTC's antitrust lawsuit hearing against the deal will not begin until August 2. This date is well past the contracted deadline of July 18, 2023, effectively triggering a breach in the agreement.

Technically, a failed closure would require Microsoft to pay Activision a $3 billion "breakup fee." However, since something outside of Microsoft's and Activision's control is causing the delay, it's more likely the two will have to start over and cut a new deal. What that means is as yet unclear.

The original agreement was to pay Activision $95 per share, a 40-percent premium over its then $65 market price. Since then, Activision's stock has traded in the mid-to-high 70s. It is currently priced at $76.90, theoretically putting Activision in a better bargaining position for a redeal.

However, Activision's public stance has been that it wants the merger just as much as Microsoft does. So it's within the realm of possibility that the two shake hands and say, "Same deal."

Microsoft and Activision agreed to the merger nearly a year ago. At the time, both companies expected to have the acquisition closed as early as November 2022. However, the record-breaking $68.7 billion buyout immediately got the attention of multiple regulators in several countries, including the FTC.


Original Submission

Related Stories

UK Government Blocks Microsoft's Proposed Activision Purchase 12 comments

UK government blocks Microsoft's proposed Activision purchase

https://arstechnica.com/gaming/2023/04/uk-government-blocks-microsofts-proposed-activision-purchase/

In its long-awaited final report, the United Kingdom's Competition and Markets Authority said that Microsoft's proposed $69 billion acquisition of Activision would "result in a substantial lessening of competition" (SLC) in the supply of cloud-gaming services in the UK. As such, the regulator said that "the only effective remedy to this SLC and its adverse consequences is to prohibit the Merger."

The final report cites Microsoft's "strong position" in the cloud-gaming sector, where the company has an estimated 60 to 70 percent market share that makes it "already much stronger than its rivals." After purchasing Activision, the CMA says Microsoft "would find it commercially beneficial to make Activision's titles exclusive to its own cloud gaming service."

Microsoft has in recent months signed deals with Nvidia and smaller cloud-gaming providers in an attempt to "mak[e] even more clear to regulators that our acquisition of Activision Blizzard will make Call of Duty available on far more devices than before," as Microsoft Vice Chair and President Brad Smith said in a statement last month. But the CMA said these kinds of cloud-gaming deals—which Microsoft submitted to the CMA as a proposed remedy for any anticompetitive effects of the merger—were "limited to cloud gaming providers with specific business models" and thus not sufficient to address the regulator's concerns.

Previously:
Microsoft and Activision Will Miss Their Contractual Merger Deadline 20230115
FTC Moves to Block Microsoft's Activision Acquisition 20221209
The Biggest Deal in Gaming is Under Fire From U.S. Senators 20220403
Microsoft Set to Purchase Activision Blizzard in $68.7 Billion Deal 20220118

Related:
Microsoft's Latest Tactics Show that Gabe Newell of Valve was Right to Worry 20160306

FTC: Xbox-Exclusive Starfield is “Powerful Evidence” Against Activision Deal 8 comments

https://arstechnica.com/gaming/2023/06/ftc-xbox-exclusive-starfield-is-powerful-evidence-against-activision-deal/

For months now, Microsoft has sworn up and down that it has no interest in making Call of Duty exclusive to the Xbox if and when its proposed $69 billion Activision acquisition is approved. But as the FTC's request for an injunction stopping that acquisition heads toward opening arguments this week, the federal regulator cites one piece of what it calls "powerful evidence" that it can't trust Microsoft's assurances. In short, as the FTC puts it, "Microsoft's actions following its 2021 acquisition of ZeniMax speak louder than Defendants' words."
[...]
Rather than focusing on what it calls a "strained analogy" to ZeniMax, Microsoft would prefer the court look at Microsoft's purchase of Minecraft-maker Mojang, which has continued to publish the game on a variety of platforms after becoming part of Microsoft. This is a better analogy for Call of Duty, Microsoft writes, because Minecraft was similarly "an existing, multi-player, cross-platform franchise like COD."
[...]
Call of Duty is unlike Minecraft, the FTC argues, in part because Minecraft is available in largely the same form on mobile phones, tablets, and the Switch. "Even if Microsoft took Minecraft off of rival consoles and subscription and cloud gaming services, it would still be available for play on many other devices. The context for Call of Duty is very different."

Regardless, the FTC also argues that this manufactured categorization doesn't matter, because Microsoft's exclusivity decision applied to "all future ZeniMax games." While Microsoft said in 2021 that "some" future Bethesda games would be Xbox exclusives, no Bethesda non-exclusives have been announced since then.

Previously:
US Moves to Block Microsoft's Activision Takeover - 20230613
Microsoft and Activision Will Miss Their Contractual Merger Deadline - 20230115
FTC Moves to Block Microsoft's Activision Acquisition - 20221209
The Biggest Deal in Gaming is Under Fire From U.S. Senators - 20220403

Related:
Microsoft Acquires ZeniMax Media and Bethesda Softworks for $7.5 Billion - 20200921


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  • (Score: 2) by Snotnose on Tuesday January 17 2023, @10:02PM

    by Snotnose (1623) on Tuesday January 17 2023, @10:02PM (#1287266)

    30-40 years after all the oil companies merged, and the media merged, and who the $diety knows how many tech companies got bought out to make the behemoths we have today.

    Someone who isn't on the take and has the power to say "um, this ain't a good thing for the average folk" gets a hearing.

    --
    I hate it when I see an old person, then realize we went to high school together.
  • (Score: 0) by billbellum on Wednesday January 18 2023, @12:59AM

    by billbellum (18539) on Wednesday January 18 2023, @12:59AM (#1287285)

    Might be a good thing, like the merger of AT$T and MaBell, back in the Fiddies.

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