Breaking: Major Block Put on Microsoft's Plan to Acquire Activision Blizzard

Microsoft's $68.7 billion acquisition of Activision Blizzard has hit a temporary roadblock, as a federal court has issued a restraining order against the deal following a preliminary injunction request from the FTC. This is just the latest in a series of challenges faced by Microsoft since the announcement of the acquisition in January 2022, with regulators and rival companies expressing concerns over the deal. While the court order may potentially impede Microsoft's efforts to complete the acquisition by the agreed deadline, it remains to be seen what the ultimate outcome will be.

Microsoft and Activision are bound by an order that prohibits them from completing their deal until a specific time frame. This timeframe is set to be "after 11:59 p.m. Pacific Time on the fifth business day after the Court rules on the FTC's request for a preliminary injunction," or any date set by the court that falls later. The court has scheduled an evidentiary hearing on the preliminary injunction for June 22 and 23, making it unlikely that the transaction will be finalized by this month. However, the deadline for the completion of the deal is July 18. If Microsoft fails to renegotiate an extended deadline, it will have to pay Activision Blizzard a $3 billion breakup fee.

In the event that the court grants the injunction, the FTC can proceed with building its legal case before the deal is finalized. Despite the FTC's decision to file for the injunction, Microsoft remained optimistic and announced that the decision-making process would be expedited, which it believed would benefit all parties involved. However, Microsoft had previously indicated that it might proceed with the acquisition even without the FTC's approval. It remains to be seen how the situation will unfold in the coming weeks as Microsoft continues to make its case.

In addition to dealing with the FTC, Microsoft is also attempting to make headway in the UK following the CMA's decision to block the deal. Microsoft has scheduled its first appellate hearing for July 24 as part of its appeal case filing. It is intriguing to see how the appeal will play out, particularly in light of the EU's approval of the Activision acquisition and the fact that numerous regulatory agencies from around the world, including Brazil and South Korea, have already approved the deal. Nonetheless, it appears that Microsoft's ambitions for Activision Blizzard may have to be postponed for a little while longer.

Source: The Verge