A federal court has issued a temporary restraining order that will prevent Microsoft from closing its $68.7 billion acquisition of Activision Blizzard, at least for now. The Federal Trade Commission (FTC) filed a complaint seeking to get the restraining order and a preliminary injunction.
Microsoft and Activision announced the planned acquisition in January 2022, and since then, it has faced significant regulatory scrutiny. Although EU regulators approved the deal in May, UK regulators blocked the deal in April, and the FTC sued in December in another attempt to block the transaction.
The Order
The court has agreed to the restraining order while it considers that injunction. As a result of today’s order, Microsoft and Activision cannot complete the acquisition until “after 11:59 p.m. Pacific Time on the fifth business day after the Court rules on the FTC’s request for a preliminary injunction” or a date set by the court (whichever is later).
The court has also set an evidentiary hearing on the preliminary injunction for June 22nd and 23rd. Therefore, it is highly unlikely that these companies will close the transaction this month.
Implications
If the courts grant the injunction, the FTC would have a chance to make its legal case before any deal can be done. Technically, the transaction is supposed to close before a July 18th deadline. If the deal isn’t renegotiated to extend that deadline, Microsoft is obligated to pay Activision Blizzard a $3 billion breakup fee.
The FTC’s latest move has put a temporary hold on the Microsoft-Activision deal, adding to the regulatory hurdles that the companies have faced since announcing their planned acquisition. The outcome of the preliminary injunction hearing will determine whether the deal can proceed or whether the FTC will be successful in blocking it.
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