The move is necessary because with this, both the companies can overcome the remaining regulatory hurdles to their $69 billion deal, news agency Reuters cited a person familiar with the matter as saying.
What happens after the contract expires
The expiration of the contract will not lead to the collapse of the deal but it will give both companies the right to walk away from the transaction. According to the source, Microsoft “has been seeking the contract extension to ensure that Activision is not wooed by another potential acquirer or has a change of heart.”
The details of the contract extension and the terms under negotiation are not known yet. The companies are also said to continue negotiation if they do not have an agreement by the end of Tuesday.
Regulatory hurdles in the UK
The extension also makes sense because it will also give both companies much-needed time to find a solution in Britain, where the Competition and Markets Authority (CMA) blocked the largest deal in the gaming sector. Notably, Microsoft and Activision are negotiating potential remedies with the CMA aiming to address its antitrust concerns.
Microsoft has already signed a deal that will keep “Call of Duty” on the Sony PlayStation console for 10 years. Sony had been one of the deal’s toughest critics and claimed that Microsoft can either make the game Xbox-exclusive or bring a sabotaged version on Sony.
A US appeals court has also rejected the US Federal Trade Commission’s request to pause the acquisition, essentially, removing one of the last obstacles to the deal closing.
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