Summary
The Federal Trade Commission is likely to pause its in-house trial withMicrosoftover the tech giant’s acquisition of Activision Blizzard in a bid to pursue settlement talks, according to a new report. This change of heart coincides with the increasinglawmaker pressure on the FTC to stop opposing Microsoft’s Activision Blizzard deal.
Following a week-long hearing in late June, the Ninth Circuit Court of Appealsdenied the FTC’s attempt to block Microsoft’s Activision Blizzard acquisitionon July 14. While the regulator is still pursuing an in-house trial over the acquisition, its federal court defeat was widely interpreted as a fatal blow to its chances of actually preventing the deal from going through.
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The FTC has now suspended an administrative challenge to the deal that was scheduled for an in-house trial in August, Bloomberg reports, citing regulatory filings. This turn of events opens the doors for settlement talks between Microsoft and the FTC. In the meantime, the agency is still appealing the federal court ruling approving the deal, but seeing how its preliminary injunction request has been denied, Microsoft could ostensibly close the acquisition without the FTC’s explicit approval. Given that state of affairs, the regulator’s decision to pause its administrative case against the $68.7 billion acquisition could be interpreted as a signal that the FTC is now open to negotiating concessions fromMicrosoftinstead of continuing to outright oppose the deal.
Assuming settlement talks are truly on the horizon, such discussions are likely to be fairly expedient, not least because Microsoft already missed its original July 18 deadline for closing the deal. In response to that development,Microsoft and Activision Blizzard agreed to extend the acquisition deadlineby another three months earlier this week.
In exchange for its continued cooperation, theCall of Dutymaker managed to raise the previously agreed $3 billion termination fee by another $500 million. Additionally, should the deal be terminated after September 15, the breakup fee that Microsoft will have to pay to Activision Blizzard will rise to $4.5 billion. For added context, that sum dwarfs Activision Blizzard’s most successful year on record, which was 2021, when the company reported $3.16 billion in profit.
Besides the FTC’s challenge, the acquisition is currently still facing regulatory pushback from the British Competition and Markets Authority.Microsoft already appealed the UK’s rejection of the Activision Blizzard dealin late May, with the final decision in those proceedings being expected to arrive by the end of summer.
