Microsoft and the UK’s Competition and Markets Authority (CMA) will have more time to negotiate, as the court has agreed to pause the appeal. This also means that the Activision Blizzard deal probably won’t close today, with a deadline being extended by the parties.

As reported by Reuters, the UK Competition Appeal Tribunal (CAT) ruled on July 17 that a hearing on Microsoft’s appeal against the CMA’s decision to block the Activision Blizzard deal, which was due to begin on July 24, should be postponed.

The parties will now have two additional months to negotiate on new terms to address the regulator’s cloud gaming concerns and come to an agreement to finally close the $68.7 billion merger in the UK.

This is something both Microsoft and the CMA have asked the court for. This will “allow the CMA and the parties to engage swiftly and constructively in relation to Microsoft’s proposals.”

“Based upon the discussion to date, both sides — Microsoft and the CMA — have confidence that Microsoft notifying a restructured transaction is capable of addressing the concerns that the CMA has identified,” the CMA’s lawyer David Bailey said in court.

On top of that, the UK regulator recently postponed the date for its final order from July 18 to August 29. This will allow the CMA to scrutinize new remedies from Microsoft and potentially change its decision on the Activision Blizzard deal.

Meanwhile, the deadline for the merger expires on July 18. According to Bloomberg, Microsoft and Activision won’t close the deal today, as they “will continue seeking the final regulatory approvals needed for closing.”

It is worth noting that according to the terms of the merger agreement, Microsoft has agreed to pay Activision Blizzard a $3 billion fee if the deal is terminated by July 18. To avoid the fee, the parties may extend the deadline, and this is what they are likely to do to address regulatory concerns in the UK and close the merger in all jurisdictions at once.

As pointed out by Bloomberg, a violation of the UK order (i.e. Microsoft trying to close the deal by ignoring the CMA) would result in fines of up to 5% of the companies’ combined global revenue. However, the regulator could allow Microsoft to close the Activision Blizzard deal in other countries, meaning that they will remain separate companies in the UK until the merger is approved.

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