Activision Blizzard Warns Of Financial Consequences If Microsoft Deal Falls Through

Microsoft's deal to acquire Activision Blizzard is still going through the boring legal processes right now, and the next step is for Activision Blizzard's shareholders to vote to approve the deal, with this set to take place on April 28th.

As you'd expect, the company is advising that the terms of the merger are "advisable, fair to and in the best interests of Activision Blizzard and its stockholders", and therefore recommends they vote in favour of the acquisition.

One of the most interesting parts of the SEC filing (as highlighted by is the bit that talks about what happens if the merger doesn't go through, with ActiBlizz explaining that stock in the company would likely "decline significantly", and it may never return to the same price again:

"If the merger is not consummated, and depending on the circumstances that caused the merger not to be consummated, it is likely that the price of Activision Blizzard common stock will decline significantly. If that were to occur, it is uncertain when, if ever, the price of Activision Blizzard common stock would return to the price at which it trades as of the date of this proxy statement.

Accordingly, if the merger is not consummated, there can be no assurance as to the effect of these risks and opportunities on the future value of your shares of Activision Blizzard common stock."

It's also mentioned that under certain circumstances, Activision Blizzard could be required to pay Microsoft a $2.2 billion termination fee, and Microsoft could also be required to pay Activision Blizzard a reverse fee of $2-3 billion.

It seems unlikely the acquisition is going to face any roadblocks now, but we won't know the verdict of Activision Blizzard's shareholders until May 4th, so that'll give us an indication as to whether things are going smoothly or not. The entire deal is still set to be completed sometime prior to June 30, 2023, so there's a way to go yet.

Any thoughts on this? Let us know down in the comments below.

[source, via]