Microsoft Will Have to Pay Activision $3 Billion if Acquisition Fails

Xbox Activision Blizzard

Over the course of several months, Microsoft’s proposed acquisition of Activision Blizzard has been under investigation by regulatory authorities around the world, and recently, the deal hit a massive roadblock with the United Kingdom’s Competition and Markets Authority (CMA) refusing to approve it due to how it could impact competition in the cloud gaming space.

While Microsoft and Activision have both said that the CMA’s decision will be appealed, it’s looking much less likely that the deal will go through, which, of course, is a big blow to both companies. Rubbing salt in the wounds of Microsoft, however, is the fact that even if the deal fails to get approved, the company will still have to pay Activision Blizzard a sizeable amount- to be precise, $3 billion as a breakup fee.

The same was revealed in a CNBC interview with Activision Blizzard CEO Bobby Kotick. When asked about how the company will invest that money in itself should it come to that, Kotick said, “Well, I think our first focus is trying to get the deal done, which I think is in the interest of the industry, [and] of competition. If it weren’t to get done, you know, by the end of the year, I think we’ll be sitting on something like $18 billion of cash. And, I think if you look at our 30-year history, we have deployed capital for the benefit of our shareholders very well and we’ll continue to do that.”

Of course, $3 billion is very little compared to the $69 billion price that Microsoft will be paying if the acquisition does go through, but it’s no small amount either. For context, that’s nearly half of what Microsoft paid when it acquired Bethesda.

How long it will be before we get a final resolution for this whole process is anyone’s best guess, but Microsoft is continuing to take steps to convince relevant authorities that its acquisition of Activision Blizzard would not harm competition, having recently signed another 10-year agreement with cloud platform Nware.



Microsoft Will Have to Pay Activision $3 Billion if Acquisition Fails
Source: News Beginning

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