The US Federal Trade Commission (FTC) has filed its appeal against Judge Jacqueline Scott Corley’s ruling to deny the preliminary injunction they had requested last month.
The contents of the appeal are not available yet, but they soon will be. In any case, the FTC needs to obtain an emergency stay from the United States Court of Appeals for the Ninth Circuit, as a full ruling on the appeal will most certainly not be quick enough to stop Microsoft’s closing of the $68.7 billion Activision Blizzard deal.
Judge Corley’s ruling also included a reduction of the temporary restraining order (TRO). As such, as things stand right now, Microsoft could close the deal on Monday, July 17th, one day ahead of the July 18th deadline originally set in the agreement with Activision Blizzard. Indeed, there’s strong indication they are preparing to do exactly that, as a company called The Trade Index already announced it’s going to replace Activision Blizzard (ATVI) in the Nasdaq-100 Index, the Nasdaq-100 Equal Weighted Index, and the Nasdaq-100 Ex-Tech Sector Index starting next Monday. On the same day, ATVI will also be removed from the Nasdaq-100 ESG Index (Nasdaq: NDXESG) prior to the market’s opening.
Microsoft and Activision Blizzard already replied via Twitter. Microsoft President Brad Smith shared the following message:
The District Court’s ruling makes crystal clear that this acquisition is good for both competition and consumers. We’re disappointed that the FTC is continuing to pursue what has become a demonstrably weak case, and we will oppose further efforts to delay the ability to move forward.
For its part, Activision Blizzard spoke through a brief tweet issued by CCO and EVP Corporate Affairs Lulu Cheng Meservey:
The facts haven’t changed. We’re confident the U.S. will remain among the 39 countries where the merger can close. We look forward to demonstrating the strength of our case in court – again.
Microsoft has to play both sides of the pond, so to speak, as opposing the FTC’s last-ditch attempt runs in parallel with the newly reopened talks with the UK’s Competition and Markets Authority. Following the ruling of Judge Jacqueline Scott Corley, Microsoft and the CMA were quick to reveal that they had mutually agreed to pause the ongoing litigation at the Competition Appeal Tribunal (CAT) to discuss how to potentially restructure the deal in a way that would be amenable to the UK regulator (which blocked the deal in April).
However, yesterday the CMA backtracked a bit from the idea that an agreement was imminent, stating that a restructured deal could potentially even face a new investigation. It is unclear what would happen if Microsoft is all set to go on Monday on the US front but hasn’t reached an agreement with the UK regulator yet.
There’s been talks of Microsoft ‘closing over’ anyway. We’ll see if that happens very soon – one way or another, the verdict is coming in a matter of days now.
