Microsoft's Activision Blizzard deal: What comes next after FTC's court loss

The Federal Trade Commission lost another court bid to halt Microsoft's $69 billion acquisition of gaming company Activision Blizzard. Yahoo Finance Senior Reporter Alexis Keenan explains what lies ahead for the deal.

Video Transcript

ALEXIS KEENAN: Microsoft and Activision have overcome yet another hurdle on the path to the largest ever gaming deal. An appeals court denied a federal trade commission bid to pause the acquisition, leaving just the UK in the mergers path. Joining us now, Yahoo Finance reporter Alexis Keenan. So Alexis, what happens now?

- Yeah. So the market seemed to think that this is kind of a done deal, right. You look at the share price. It is just a couple of bucks and a half below Microsoft's offer price of $95 a share, sitting there at $92 and change. But even if the UK, right, that has reopened its investigation, said it will start begin talking again with Microsoft, even if the UK decides it ultimately wants to block this deal, these two court decisions are really important.

So what happened on Friday is that an appellate court decided that it would agree with a lower court, with the district court, saying that the FTC has not shown that it will likely succeed on the underlying case. And so they would not allow the FTC to go ahead and try to block this deal from going forward. Very important because if a court is saying that the FTC doesn't have a great case here or is suspecting that it might not, well, that bodes well for them in the case were it to play out.

Now, the FTC's case is still pending. It's a case pending in its in-house court. It's not in the federal courts. And also, the FTC could go ahead with that. So it's not necessarily a done deal. But at least Microsoft and Activision are not going to be blocked from going ahead.

They do have that July 18, that tomorrow deadline. But I think what we should expect here is that the parties will say, let's get an extension. Let's not blow this up. There is a $3 billion breakup fee here that would go to Activision if it doesn't go through.

But under these circumstances with the courts siding with the parties, saying that they don't see too much of a anticompetitive concern, we should expect them to at least put it on hold. We've put that question out to Microsoft. We haven't heard back yet as to how they're going to respond or how they're going to deal with Activision.

We also don't know if shareholders will be given some sort of a premium. Those are Activision shareholders, will they given something as a concession if this doesn't go through on the 18th. But we also saw on Sunday, Microsoft making one more agreement to try to calm concerns, saying that it will offer its very lucrative franchise Activision's "Call of Duty" on Sony PlayStation.

So now, you have that attitude the agreement with NVIDIA added to the agreement with Nintendo, saying that they will try to calm these concerns. Now, for the FTC, these behavioral types of remedies, not great for the FTC. They don't want this, right.

They don't want to monitor out going out 10 years whether the parties are keeping to their agreements. So that can cost the FTC a lot of money. They're not going to love that. But as for now, looking like the market, at least, thinks this thing will go through.

- All right. Well, you gave us a deep dive there in a very concise way.

ALEXIS KEENAN: I hope so.

- Yes. We appreciate it. Alexis Keenan. Thank you so much.