Microsoft-Activision deal is ON

Hi this is ZipLaw! This is our Roundup Newsletter where we run through all the top news stories of this past week and explain how they impact law firms.

Here’s what we’re serving today:

• Microsoft-Activision deal is ON
• X gets hit with first DSA action
• EU's EV tariffs face Stop sign
• China's new fix for the economy
• UK business insolvencies go UP

Microsoft-Activision deal is ON

In Short: Microsoft finally bags Activision Blizzard for a cool $69bn after a rollercoaster of regulatory drama.

Here's all you need to know.

1. The Epic Gaming Soap Opera
Imagine Microsoft and Activision Blizzard as Ross and Rachel from Friends.

They've been on-again, off-again, with regulators playing the role of meddling friends. After 21 months of "will they, won't they," the UK's Competition and Markets Authority (CMA) finally gave them the green light. But not without some juicy plot twists.

2. Why was this love story initially blocked?
Picture Sony as the jealous ex. They weren't thrilled about the merger, fearing their beloved Call of Duty might become an Xbox exclusive.

The CMA initially agreed, citing concerns about the deal squashing competition in the cloud gaming world. But then, plot twist!

The CMA changed its tune, saying Microsoft wouldn't really benefit from playing keep-away with Call of Duty. Still, the drama didn't end there. The CMA blocked the deal again, leading to a courtroom saga worthy of a Netflix special.

3. So, why the sudden approval?
Microsoft made a peace offering: they'd license Activision's cloud gaming rights to Ubisoft. This means Ubisoft can offer games like Call of Duty on its streaming service, and even license them to others, including Microsoft.

It's like letting your friend borrow your favourite sweater, but you can still wear it sometimes. This move appeased the CMA, making them the only global regulator to force such a change in the deal.

Meanwhile in the US, the FTC is continuing to challenge the deal even after it closes, although it is unlikely to derail completion.

⚖️ How does this impact Law Firms?

Mergers and Acquisitions (M&A):

• Due Diligence: M&A lawyers will have conducted a thorough analysis of Activision Blizzard. Lawyers will comb through Activision Blizzard's existing contracts, from employment agreements to third-party vendor contracts. They'll identify any obligations, potential breaches, or clauses that might pose a risk or need renegotiation post-acquisition.
• Drafting and Reviewing Agreements: Lawyers will be central in drafting the primary acquisition agreement, ensuring it covers all aspects of the deal, including the purchase price, payment structure, any contingent payouts based on future performance, and representations and warranties from both parties. Beyond the main acquisition agreement, there will be several ancillary agreements to be drafted and reviewed. This includes the licensing deal with Ubisoft, non-compete clauses for key Activision Blizzard executives, and any transitional service agreements that outline how services (like IT or HR) will be provided during the integration phase.
• Regulatory Approvals and Compliance: Given the size and impact of this deal, M&A lawyers will be responsible for submitting the necessary documentation to regulatory bodies, like the CMA in the UK or the FTC in the US. This ensures the merger is compliant with local and international competition laws.

Antitrust and Competition: