The two companies had originally agreed to complete the transaction by July 18, but regulatory pushback from the U.S. and the U.K. delayed the takeover.
If Microsoft had not extended the deal deadline, the company could have been on the hook for a $3 billion breakup fee to Activision Blizzard. By extending the period for the companies to close on their transaction, Microsoft and Activision are giving themselves more time to satisfy regulators’ concerns and to get it over the line.
A new agreement between Microsoft and Activision, struck on July 18, included a provision to bump up the termination fee by increments at certain periods, if the merger is not agreed by the new deadline.
By Aug. 29, the breakup fee will be increased to $3.5 billion if the transaction is terminated by the parties, while by Sept. 15, the potential breakup fee will rise to $4.5 billion.