Microsoft is preparing to close its $69 billion acquisition of Activision Blizzard King despite the Federal Trade Commission’s (FTC) December lawsuit against the deal, a new report indicates.
According to sources close to Microsoft in the report, the company is optimistic that regulatory bodies in the UK will greenlight the acquisition after significant progress towards approval has been made in recent weeks. Sources say Microsoft’s commitments to bring the extremely popular Call of Duty franchise to Sony and Nintendo systems have persuaded regulators.
A source close to the situation said that an approval from the UK’s Competition and Marketing Authority (CMA) is expected later this week, and that Microsoft is hoping for a favorable decision from the European Commission in May. If Microsoft gets the support of both regulators, sources say the company’s plan is to rapidly close its planned acquisition for $95 a share.
According to a trader’s projections, Activision’s Tuesday $85.63 share price is expected to raise to around $95 if Microsoft moves to complete the deal. If the firm made the decision to drop it, they would sink to about $75.
Antitrust experts have reportedly said that approval from both the CMA and European Commission could make it difficult for the FTC’s suit against the deal to succeed. “They are going to cram this down the FTC’s throats,” said one source.
If this situation comes to pass, the FTC would be left alone in its challenge of Microsoft’s merger. A neutral antitrust source says that while it could still file for a temporary injunction from a US Federal court, actually getting that outcome is “far from a sure thing.”
“By law the FTC only needs to raise serious, doubtful questions about a merger to get an injunction. But as a practical matter the judge is evaluating the merits of the case,” the source said. “If Microsoft makes a deal with the Brits and the European Union it can say that antitrust concerns are resolved, and if you’re a judge that’s not a helpful fact for the FTC.”
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