Microsoft‘s acquisition of Activision Blizzard King has been met with significant legal scrutiny. However, the deal has now received approval from regulatory bodies in 39 countries, with only the UK’s Competition and Markets Authority (CMA) rejecting the acquisition.
In the United States, the Federal Trade Commission (FTC) filed for a preliminary injunction to halt the closing of the acquisition. However, the motion was denied, prompting the FTC to appeal the decision. Despite the recent appeal by FTC against the court decision which was in favor of Microsoft Activision merger, Trade Desk, an advertising technology company, is set to replace Activision Blizzard on the Nasdaq-100 Index on July 17, according to a press release from GlobeNewswire.
This move has raised speculation that Activision Blizzard’s departure from the stock exchange could be a preparation for the acquisition’s completion, should the FTC’s appeal fail to grant an injunction.
The announcement of Activision Blizzard’s exit from the stock exchange coincides with the FTC filing an appeal against Judge Jacqueline Corley’s refusal to issue a preliminary injunction. Currently, a Temporary Restraining Order is temporarily halting the deal, but it is set to expire soon (Thursday midnight).
The primary obstacles to completing the acquisition are the decision on the FTC’s appeal by the 9th Circuit Court and the CMA’s rejection in the UK. Regarding the FTC’s appeal, Microsoft’s Vice Chair and President, Brad Smith, expressed disappointment, stating that the acquisition is beneficial for competition and consumers.
The District Court’s ruling makes crystal clear that this acquisition is good for both competition and consumers. We’re disappointed that the FTC is continuing to pursue what has become a demonstrably weak case, and we will oppose further efforts to delay the ability to move forward.Brad Smith, Vice Chair and President Microsoft
Meanwhile, Activision Blizzard’s CEO, Bobby Kotick, expressed skepticism about the FTC’s appeal in an interview with CBNC, believing it would waste taxpayer resources and is unlikely to be productive.
The motion to remove Activision Blizzard from the stock exchange suggests that Microsoft and Activision Blizzard’s leadership have confidence that the 9th Circuit Court will uphold Judge Corley’s ruling and deny the FTC’s injunction.
This strategic move indicates that both corporations may be preparing to close the deal promptly after the Temporary Restraining Order expires. However, the closure would still proceed despite the CMA’s rejection of the deal.
Following Judge Corley’s decision, both the CMA and Microsoft agreed to suspend their appeals with the UK Tribunal to explore a possible out-of-court settlement. Microsoft has shown willingness to make small divestments, primarily in the cloud gaming sector, to overcome the CMA’s concerns. However, such divestments would require a fresh investigation and restart the regulatory process.
The current deadline for the negotiated deal between Microsoft and Activision Blizzard is July 18. It appears that both the FTC and the CMA are employing delay tactics to impede the merger. Whether this strategy will ultimately succeed remains uncertain.
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