Microsoft Will Reportedly Pay Activision Blizzard $3 Billion If Regulators Block The Merger
Microsoft is already planning to spend a lot of money on acquiring Activision Blizzard. Sure enough, it's a deal that's likely to pay off many times over, as it gains the rights to titles such as Call of Duty, Overwatch, Crash Bandicoot, and many, many more. But of course, that's only if the deal actually goes through.
According to a report from The Verge, Microsoft will still have to send a whole lot of money Activision Blizzard's way if regulators don't give the acquisition the go-ahead. The merger agreement contains a clause that would send Microsoft a termination bill of up to $3 billion, if the termination is caused by an "injunction arising from Antitrust Laws".
Related: How Can Sony Compete With Xbox's Activision Blizzard Buyout?
The minimum that Microsoft would have to pay in this scenario is $2 billion, so it's an expensive situation either way. It's also a real possibility, with the Federal Trade Commission (FTC) becoming increasingly fearful of monopolisation in the tech industry. In fact, it announced plans to alter merger guidelines on the same day that the Microsoft and Activision Blizzard deal was made public.
However, there are also plans put in place for a scenario in which Activision Blizzard wishes to back down from the deal. In the case that the company's shareholders vote against the merger, it would have to pay a $2.27 billion termination fee. Therefore, it will be in both sides' best interest to ensure that the acquisition goes ahead.
As the FTC's investigation ramps up, it's possible that Microsoft has already had to start making concessions. As we reported recently, Microsoft has doubled down on its initial plans to honour all of Activision's existing arrangements with Sony. It has now said that
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