According to sources, Microsoft has been readying its legal defenses against a potential lawsuit in response to the titanic deal.
In January of this year, Microsoft announced that it planned to acquire World of Warcraft and Call of Duty studio Activision Blizzard in a landmark $68.7 billion deal. The news has encountered its share of scrutiny from a number of parties, including the US and UK governments.
This week, new reports allege that regulators are split on whether or not the deal should continue forward. According to the New York Post, the four members of the Federal Trade Commission appear to be at odds over the decision to approve the acquisition, with one Democratic member joining Christine Wilson, the sole Republican member, in support of the merger.
As such, the board would be split 50-50, which would put Lina Khan, the board’s chairperson, in a tough spot. Khan has developed a platform out of criticism of the tech sector and its penchant for mergers and acquisitions. According to reports, Khan has taken an interest in the Microsoft/Activision deal, and a tie across the board could potentially damage her reputation as chair. For this reason, many are expecting Khan to make a motion to approve a settlement, meaning the deal would be approved, but be wrought with a number of concessions. In other words, a compromise.
Meanwhile, despite the news that the FTC may not sue to block the deal, Microsoft is steeling itself for legal action. According to reports, the tech giant is preparing a defense against a potential lawsuit from the Commission. This is likely a response from reports last month that the FTC planned to sue Microsoft over the deal.
When the acquisition was announced in January, it instantly became one of the largest potential transactions in the history of the tech industry, even towering over Microsoft’s most notable purchases--such as its $26.2 billion acquisition of LinkedIn, or its $8.5 billion acquisition of Skype. As such, it’s not surprising to see its proposed deal with Activision Blizzard fall under this level of scrutiny. With the FTC reportedly split, there is no clear-cut path forward for the deal, but you can be sure Microsoft will fight tooth-and-nail for its approval.
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