Microsoft is in talks about an extension of its acquisition contract with video game maker Activision Blizzard, which is set to expire on Tuesday, so the parties can overcome the remaining regulatory hurdles to their $69 billion deal, a person familiar with the matter said on Monday.
The expiration of the contract would not automatically lead
to the collapse of the deal, as it simply affords either company the right to
walk away from the transaction.
Nonetheless, Microsoft, which makes the Xbox gaming console,
has been seeking the contract extension to ensure that Activision is not wooed
by another potential acquirer or has a change of heart, the source said.
The terms of the extension under negotiation and whether it
would come with more financially advantageous terms for Activision could not
immediately be learned.
The companies will continue to negotiate the extension if
they do not have an agreement by the end of Tuesday, according to the source,
who requested anonymity because the matter is confidential.
Microsoft and Activision did not immediately respond to
requests for comment.
An extension would give the companies more time to find a
regulatory solution in Britain, the only major jurisdiction that stands in the
way of them completing what would be the largest acquisition in the gaming
sector.
Microsoft and Activision are negotiating potential remedies
with the Competition and Markets Authority (CMA) which they hope will appease
its antitrust concerns.
The country's antitrust regulator has argued that
Microsoft's commitment to offering access to Activision's multi-billion dollar
"Call of Duty" franchise to rival cloud gaming platforms would not
effectively protect competition in the market. The CMA has agreed to extend its
probe to Aug. 29 to allow for more negotiations with the companies.
Last week, Microsoft signed a pact to keep "Call of
Duty" on Sony Group's PlayStation console. Sony had been one of the deal's
toughest critics, arguing that it could stifle consumer choice.
On Friday, a US appeals court rejected the US Federal Trade
Commission's request to pause Microsoft's acquisition of "Call of
Duty" maker Activision. The decision removed one of the last obstacles to
the acquisition closing.
Activision's shares closed at $93.2 on Monday, a small
discount to the $95-per-share deal price, indicating that most investors now
viewed the completion of the deal as likely. © Reuters