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Activision Blizzard Set to Exit Nasdaq-100 Index as Microsoft’s Acquisition Nears Completion
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Activision Blizzard will be removed from the Nasdaq-100 index, as Microsoft (MSFT ) edges closer to finalizing its $69 billion acquisition of the gaming giant.
According to a statement from Nasdaq, Activision Blizzard will not be available when the stock markets open on July, 17 2023. This is just a day before the deal’s deadline of July 18. Another tech company, The Trade Desk (TTD ), will replace Activision Blizzard on the stock exchange.
This development follows the Federal Trade Commission’s (FTC) decision to file an appeal to challenge a recent court ruling. Judge Jacqueline Scott Corley ruled in favor of Microsoft, denying the FTC’s request for a preliminary injunction.
According to the ruling, the agency failed to provide sufficient evidence of potential anti-competitive effects. The FTC appeal hopes to obtain a preliminary injunction preventing the Activision Blizzard and Xbox merger, prior to a trial set for August. Both Microsoft and Activision have expressed disappointment in FTCs decision to file the appeal.
The development is a clear indicator that Microsoft is confident that the deal will go through before the deadline. The Temporary Restraining Order (TRO) preventing Microsoft from finalizing the deal will expire on July 13.
Unless the appeals court extends the TRO, Microsoft will be free to proceed with the acquisition from July 14. Failure to complete the deal by July 18 would result in Xbox paying Activision Blizzard a $3 billion termination fee, potentially leading to renegotiation of the acquisition terms.
In addition, Microsoft and Activision Blizzard are challenging the UK’s Competition and Markets Authority’s (CMA) decision to block the merger. However, all parties involved are currently engaged in discussions to explore possible restructuring options for the buyout.
The outcome of the ongoing appeals and potential restructuring negotiations will determine whether the deal can go through before the imminent deadlines.
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