Microsoft and Activision Will Miss Their Contractual Merger Deadline
upstart writes:
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.
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