6/11/2023 0 Comments Tengami game wont work![]() ![]() The FTC is suing Microsoft to try to block the deal. But in the US and the EU, it could take much longer to find out what happens. The CMA handed down its final decision on April 26, blocking the deal (pending appeal). Activision Blizzard's stock price has fallen by more than 10% today, April 26, following the announcement of the CMA's decision. Some have theorized about what Microsoft could do with the $68 billion it planned to spend on Activision Blizzard if the deal craters, such as more aggressively pursuing timed exclusives for Xbox and Game Pass, but that is all speculation at this point. Still, the deal closing would be bad news for Microsoft. As of March 31, Microsoft had a whopping $104.4 billion in cash on hand. After all, Microsoft generated $53 billion in revenue and $18.3 billion in profit in the last quarter alone. Should Microsoft have to pay the $3 billion breakup fee, it wouldn't be game over for the technology giant, of course. That last point is moot because Activision Blizzard shareholders have already said yes to the buyout. There are various conditions that could trigger this payment to Microsoft, Activision Blizzard "materially" breaching its agreements, or Activision Blizzard stockholders failing to agree to the sale. Should Activision Blizzard be the party to cause the deal to go south, it would pay Microsoft a termination fee of $2.27 billion. The reverse termination fee is now the highest it could be, $3 billion, because any such termination notice would happen after that date. The payment to Activision Blizzard would have been $2 billion if the termination notice was provided before January 18, 2023, or $2.5 billion if that happened between then and April 18, 2023. There is also a situation where Activision Blizzard would need to hand over multiple billions of dollars.Īccording to the official terms of the deal, Microsoft will be required to pay Activision Blizzard what is called a "reverse termination" fee of $3 billion if the deal doesn't get done. Microsoft would be on the hook for a huge payout if its deal to buy Activision Blizzard ultimately falls apart. If they commit to that, they can appeal the UK’s inevitable approval with those carve outs, and they will win," Pachter said. "The two things Microsoft can do to address the UK’s concerns are (1) carve out Game Pass in the UK and keep all Activision Blizzard content off of the service and (2) commit that they will keep the price of Game Pass at the current price plus no more than the rate of inflation (2 – 3% per year) for the next ten years. Pachter said Microsoft might be able to convince regulators to give the go-ahead to the deal by keeping Activision Blizzard content off Game Pass in the UK and agree to keep Game Pass prices stable in the UK. Wedbush Securities analyst Michael Pachter told GameSpot that "there is a workaround" for Microsoft to get the deal done, and it involves offering remedies. "We're especially disappointed that after lengthy deliberations, this decision appears to reflect a flawed understanding of this market and the way the relevant cloud technology actually works," Smith said. Microsoft president Brad Smith said Microsoft continues to be "fully committed" to getting the deal done and will appeal the decision. "Global innovators large and small will take note that-despite all its rhetoric-the UK is clearly closed for business," Activision Blizzard said. In its statement following the CMA's announcement, Activision Blizzard said it will work with Microsoft "aggressively" to reverse the decision on appeal. But what if, after all of that, the deal still doesn't go through? Here's what happens next, and how Microsoft could be on the hook to pay billions in a breakup fee. Microsoft and Activision Blizzard are already in the process of appealing and pushing to get the deal done. The decision was a shock to many industry-watchers, who believed the CMA would give it the green light. However, the cloud gaming market proved to be a sticking point. The CMA initially held concerns about the console marketplace before reconsidering. The deal has been cleared in a number of countries already, but in a major blow to Xbox, the UK's Competition & Markets Authority announced on Wednesday that it would block the deal due to concerns about cloud gaming. Microsoft is in the process of attempting to complete one of the biggest acquisitions in history, a $68.7 billion buyout of Call of Duty company Activision Blizzard.
0 Comments
Leave a Reply. |