Microsoft’s acquisition of Activision Blizzard has hit a roadblock as a federal court has issued a temporary restraining order, preventing the $68.7 billion deal from closing. The order comes in response to a complaint filed by the Federal Trade Commission (FTC), which is seeking a preliminary injunction.

The court’s decision to grant the restraining order allows for further consideration of the injunction, giving the FTC an opportunity to present its legal case before any final decision is made. Under the terms of the restraining order, Microsoft and Activision are prohibited from completing the acquisition until a specified date after the court rules on the FTC’s request for a preliminary injunction.

An evidentiary hearing on the injunction has been scheduled for June 22nd and 23rd, making it highly unlikely that the transaction will be finalized this month. Microsoft spokesperson David Cuddy expressed the company’s support for expediting the legal process, stating, “Accelerating the legal process in the US will ultimately bring more choice and competition to the gaming market.”

The temporary restraining order allows for a swift resolution while awaiting the court’s decision. The acquisition, which was announced by Microsoft and Activision in January 2022, has faced significant regulatory scrutiny in recent months. While EU regulators approved the deal in May, UK regulators blocked it in April, leading Microsoft to appeal the decision.

Additionally, the FTC filed a lawsuit in December 2022, aiming to block the acquisition. According to the original agreement, the deal was expected to close by July 18th. Failure to meet this deadline could result in Microsoft paying a $3 billion breakup fee to Activision Blizzard unless the deadline is renegotiated. As the legal proceedings unfold, the fate of the Microsoft-Activision merger remains uncertain. The court’s decision on the preliminary injunction will play a pivotal role in determining whether the acquisition can proceed.

The outcome of these proceedings will have significant implications for both companies and the gaming industry as a whole. Update June 13th, 10:04 PM ET: Microsoft has provided a statement expressing its understanding of the need for a temporary restraining order and its confidence in the court’s swift decision-making process.

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