By David Shepardson
WASHINGTON (Reuters) -Time is running out on a deadline for Microsoft to complete its $69 billion merger with Activision Blizzard, compelling the companies to ask a U.S. judge on Wednesday to quickly get the ball rolling on the Federal Trade Commission’s legal bid to block the deal from closing.
U.S. District Judge Edward Davila on Tuesday had set a June 22-23 evidentiary hearing in San Francisco and temporarily blocked the companies from completing the deal pending a future decision on whether to grant a preliminary injunction.
But “time is of the essence,” the companies wrote in a court filing Wednesday, noting Microsoft’s agreement to acquire Activision has a termination date of July 18 and contains a $3 billion termination fee.
The companies said a preliminary injunction would effectively kill the merger. “Let there be no doubt, a preliminary injunction ruling is the only decision that matters under these challenging deadlines,” Microsoft and Activision said.
The FTC declined to comment.
Since the upcoming evidentiary hearing is so important to the outcome, the companies asked the court to schedule a minimum of five days beginning on June 22 and running through the week of June 26. They also asked for a case management conference to be set for Thursday but emphasized they were not seeking to delay a resolution by asking for a longer evidentiary hearing.
If the court grants the FTC preliminary injunction “it will effectively block the transaction because the FTC’s process is ‘glacial’ and one no substantial business transaction could ever survive,” Microsoft and Activision wrote citing a 1986 case.
The hearing in the FTC administrative proceeding is set to begin Aug. 2.
The FTC has argued the transaction would give Microsoft’s video game console Xbox exclusive access to Activision games, leaving Nintendo consoles and Sony Group Corp’s PlayStation out in the cold.
Microsoft’s bid to acquire the “Call of Duty” video game maker was approved by the EU in May, but British competition authorities blocked the takeover in April.
(Reporting by David Shepardson; Editing by Leslie Adler)