Microsoft and Activision agree to extend $69 billion deal deadline in wait for UK approval
Microsoft and Activision Blizzard on Wednesday agreed to extend the deadline for their merger agreement until Oct. 18, Activision said in a statement Wednesday.
The two companies had originally agreed to complete the transaction by July 18, but regulatory pushback from the U.S. and the U.K. delayed the takeover.
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If Microsoft had not extended the deal deadline, the company could have been on the hook for a $3 billion breakup fee to Activision Blizzard. By extending the period for the companies to close their transaction, Microsoft and Activision are giving themselves more time to satisfy regulators’ concerns and to get it over the line.
A new agreement between Microsoft and Activision, struck on July 18, included a provision to bump up the termination fee by increments at certain periods, if the merger is not agreed by the new deadline.
By Aug. 29, the breakup fee will be increased to $3.5 billion if the transaction is terminated by the parties, while by Sept. 15, the potential breakup fee will rise to $4.5 billion.
UK regulator ready to negotiate
The extension was made as the U.K. Competition and Markets Authority moved to delay its review of the deal until Aug. 29. Microsoft and Activision are now giving themselves enough time for the CMA appraisal to finalize.
The CMA had initially blocked the transaction in May, citing concerns over the threat to competition in the nascent cloud gaming market. The U.K. regulator changed tack and paused all litigation after the U.S. Federal Trade Commission’s attempt to block the deal failed in court.
The CMA said it was “ready to consider any proposals from Microsoft to restructure the transaction” in a way to satisfy the regulator’s concerns.
The regulator will now need to open a fresh review into the deal based on its past work. While this could ordinarily take several months, the watchdog is looking to expedite the process to meet its own Aug. 29 deadline.
The CMA will allow Microsoft to submit a restructured deal. When the European Union gave the greenlight for the takeover, it was predicated on some concessions from Microsoft, which included royalty-free licenses to cloud gaming platforms to stream Activision games.
Microsoft offered similar concessions to the CMA, but the remedies were rejected, as the regulator argued they were hard to enforce and wouldn’t address concerns over a concentration of power in the cloud gaming space. Microsoft will have to come up with a new package of measures beyond its previous offer to allay the CMA’s concerns.
Regulators around the world had been concerned about the nature of the deal due to concerns it could limit distribution of Call of Duty.
Sony and other industry players had expressed concern that Microsoft could have kept Call of Duty off of its PlayStation platform or reduced the quality of the game on competing platforms.
The Activision board also agreed a 99 cents per share dividend.
Armis CEO Yevgeny Dibrov and CTO Nadir Izrael.
Courtesy: Armis
Cybersecurity startup Armis has raised $435 million in a funding round that values the company at $6.1 billion.
“The need for what Armis is doing and what we are building, in this cyber exposure management and security platform, is just increasing,” CEO and co-founder Yevgeny Dibrov told CNBC. There’s “very unique and huge demand right now, and we are continuing to grow.”
Goldman Sachs Alternatives’ growth equity fund anchored the investment, with participation from CapitalG, a venture arm of Alphabet. The security firm brought on Evolution Equity Partners as a new investor.
Armis helps businesses secure and manage internet-connected devices and protect them against cyber threats. The company chose Goldman’s growth fund due to its strong track record helping companies accelerate growth toward initial public offerings, Dibrov said.
“This is the partner for us to go to the next stage and continue to build here a real generational business to get to the Hall of Fame of cyber and SaaS businesses,” he said.
In September, Bloomberg reported that the company was exploring as much as seven stake offers. Dibrov told CNBC the funding round was an outcome of those talks.
Founded in 2016, Armis in August said it surpassed $300 million in annual recurring revenues. The California-based company achieved that milestone less than a year after topping $200 million in ARR.
Armis raised $200 million in an October 2024 funding round with General Catalyst and Alkeon Capital. Previous backers have included Sequioa Capital and Bain Capital Ventures. Armis also raised $100 million in a secondary offering in July.
Dibrov said Armis is aiming for an IPO at the end of 2026 or early 2027, but he said he’s in no rush and is waiting on “market conditions.” The company’s primary goal is to hit $1 billion in annual recurring revenue, he said.
“Going public will be before that,” he said.
WATCH: Tech meets policy: Cybersecurity collaboration necessary in the era AI, says Google engineer
Rick Smith, CEO of Axon Enterprises.
Adam Jeffery | CNBC
Axon Enterprise‘s stock plummeted 17% after the TASER maker missed Wall Street’s third-quarter profit expectations as it grapples with tariff constraints.
Adjusted earnings totaled $1.17 per share adj., falling short of a $1.52 per share forecast from LSEG. Adjusted gross margins fell 50 basis points from a year ago to 62.7%, which Axon attributed to tariff impacts.
Axon’s connected devices business, which includes its TASER and counter drone equipment, felt the biggest pinch during the first full quarter with tariffs. The business segment accounted for over $405 million in revenues, increasing 24% year over year.
“As long as tariffs stay in place, I view that as sort of a one-time adjustment,” finance chief Brittany Bagley said during the earnings call. “Now that’s baked into the gross margins.”
Bagley expects growth in the company’s software business to eventually offset margin losses long-term. Software and services revenues jumped 41% from a year ago to $305 million.
Total revenues grew 31% from a year ago to $711 million, topping the $704 million expected by analysts polled by LSEG. The U.S. accounted for 84% of sales.
The Arizona-based company reported a net loss of $2.2 million, a loss of 3 cents per share, versus net income of $67 million, or 86 cents per share in the year-ago period.
Axon lifted its full-year revenue outlook to $2.74 billion, from between $2.65 billion and $2.73 billion. FactSet analysts expected $2.72 billion at the midpoint.
The company expects revenues between $750 million and $755 million during the fourth quarter, which was above LSEG analyst expectations of $746 million.
Along with the results, Axon said it is acquiring Carbyne in a deal that values the emergency communications platform at $625 million. The deal is expected to close next year in the first quarter.
Axon shares have jumped more than 60% over the last year and are up 18% year to date as demand for its security tools accelerates.
“We are building an elite business that is still nowhere near its ultimate potential, and we are doing it with a team that is rapidly bought into the mission,” said Axon’s president Josh Isner on the earnings call.
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