MSFT/ATVI DEAL PRIMER: Microsoft (MSFT) & Activision (ATVI) FTC Trial

The judge ruling on the FTC preliminary injunction could come as soon as this week. 

If the FTC preliminary injunction is granted, it would mean MSFT/ATVI cannot complete the deal while the FTC antitrust review is ongoing. The deal has a deadline of 18th July 2023, and the FTC antitrust hearing is not until August 2nd. 

If the preliminary injunction is granted to the FTC, the deal cannot close by the deadline and MSFT would be required to pay ATVI a USD 3bln break-up fee, or renegotiate the deal. 

If the FTC injunction is not granted (ruling in favour of MSFT), it would clear the path for the deal to close in the US, and providing it is completed before the July 18th deadline, MSFT will not have to pay the USD 3bln break-up fee. Barron's highlights the FTC would also likely withdraw its antitrust complaint, as it did when a judge declined to grant the regulator an injunction blocking the acquisition of Within Unlimited by Meta (META). 

There still remain regulatory hurdles, however, where despite the EU approving the deal, the UK CMA has rejected it, with MSFT currently appealing the decision.

05 Jul 2023 - 17:26- EquitiesResearch Sheet- Source: Newsquawk