- A U.S. federal court has granted the request made by the FTC to temporarily block the closure of Microsoft’s deal to acquire Activision Blizzard.
- The deal has already been blocked in the U.K. and is now facing scrutiny by regulators in the U.S.
A federal court in California granted the restraining order requested by the Federal Trade Commission (FTC) to temporarily block Microsoft’s acquisition deal with Activision Blizzard. A hearing for the case has now been set for the 22nd and 23rd of June.
According to the order, the deal will remain blocked until the court makes a ruling on the preliminary injunction filed by the FTC earlier this week. Regulatory bodies have urged caution against the deal, stating that Activision might try to proceed before court rulings are made on the anti-trust suit.
Microsoft is keen to close the deal before the initially agreed deadline of July 18, 2023. The tech giant will have to pay a $3 billion fee if the deal is not completed.
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Activision Share Prices Face Volatility Due to Regulatory Scrutiny
The deal between Microsoft and Activision has been under regulatory scrutiny since 2022, with authorities in the U.S. and U.K. not giving way and forcing Microsoft’s legal team to take the matter to the courts.
Cancellation of the deal could be on the cards if Microsoft and Activision do not convince regulators that the acquisition will not adversely affect competitiveness in the market. The primary concern of bodies like the FTC is that Microsoft could potentially block other companies from distributing games made by Activision Blizzard on devices other than Microsoft’s Xbox.
Activision’s stock has consequently seen volatility, with the approval or rejection of different regulatory bodies. The restraining order by the Competition and Markets Authority (CMA) in the U.K. resulted in an 11% price drop, despite a slight increase with the EU approval. Activision stock is currently trading at approximately $80 per share. However, as per the agreement, Microsoft had agreed to buy Activision Blizzard for $95 a share.
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