FTC delays could send Microsoft and Activision back to the bargaining table

Enlarge / Microsoft and Activision may be sent back to the bargaining table thanks to FTC delays. (credit: Getty Images | Bloomberg)

When Microsoft first announced its intention to buy Activision Blizzard nearly a year ago, the companies said they expected the deal to close during the 2023 fiscal year, which ends this coming June. That schedule now seems exceedingly unlikely, thanks to a Federal Trade Commission scheduling order setting a hearing on the government's lawsuit for August 2. That means a final government decision on the matter could be delayed until the fall or later.

More importantly, that hearing schedule would likely push the final merger approval past a contractual deadline to close the deal by July 18, as reported by the Associated Press. Hitting that deadline would technically trigger the payment of a $3 billion breakup fee from Microsoft to Activision Blizzard. In practice, though, passing the deadline would likely force both parties to come back to the table to renegotiate the deal's specifics.

Taking a fresh look

Such an opportunity for a fresh look at the deal this summer could lead to a new perspective for both sides. A year ago, Microsoft's original offer valued Activision Blizzard at about $95 per share, a more than 40 percent premium over the company's roughly $65 share price at the time. Since that offer, though, there has been a broad market downturn that has seen the value of the S&P 500 fall by nearly 15 percent in just 12 months.