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Microsoft’s Acquisition of Activision Blizzard Faces Legal Hurdles

  • June 19, 2023

Key Highlights

  1. NexTier Oilfield Solutions Inc. (NEX) and Patterson-UTI Energy, Inc. (PTEN) combine in an all-stock merger of equals.
  2. Microsoft’s (MSFT) acquisition of Activision Blizzard (ATVI) was temporarily blocked by a federal judge in California.
  3. Seven active M&A deals were successfully completed last week.
  4. Abcam (ABCM), the biotechnology supplier receives multiple takeover approaches.

Deal Update: Microsoft’s (MSFT) acquisition of Activision Blizzard (ATVI)

Microsoft is currently facing legal challenges from U.S. antitrust regulators as it pursues the acquisition of gaming behemoth Activision. These regulators are determined to obstruct the $69 billion deal, and legal proceedings are scheduled to take place in the coming weeks, as reported by Reuters.

The first legal dispute is scheduled to take place in a federal court in California from June 22 to June 29. If the proceedings advance, a subsequent conflict will ensue before an administrative law judge at the Federal Trade Commission, commencing on August 2.

Outlined below are four potential outcomes of the California hearing:

  1. Judge Jacqueline Scott Corley may grant the preliminary injunction, resulting in the termination of the deal. In the past, companies that have lost at this stage often abandon the proposed transaction.
  2. The judge may grant the preliminary injunction, leading to an extension of the deal deadline beyond July 18. The companies involved would then proceed to challenge the ruling before an FTC administrative law judge in August.
  3. Corley may reject the preliminary injunction, prompting the FTC to withdraw from the legal battle.
  4. If the judge declines to grant the preliminary injunction, the agency can choose to continue the legal battle, which can then be appealed to a federal appeals court. In any scenario, arguments regarding the deal are scheduled to be presented before an administrative law judge at the FTC in August.

If the case reaches FTC judge Michael Chappell in August, there are two potential outcomes:

  1. If Microsoft wins, the FTC staff can ask Chair Lina Khan and the commissioners who initiated the case to reconsider the verdict. If they refuse, the next step would be to take the case to a federal appeals court.
  2. If the FTC wins, the companies involved can also appeal to the commission to overturn the decision, and if necessary, they can take the case to an appeals court.

The European Commission has granted approval for the acquisition, citing Microsoft’s commitment to providing 10-year free licensing deals. These agreements ensure that European consumers and cloud game streaming services will have access to Activision’s PC and console games, promoting fair competition within the market.

However, the UK’s Competition and Markets Authority (CMA) opposed the deal in April, expressing concerns about potential limitations on innovation and reduced choices for gamers.

Despite these challenges, Activision Blizzard’s stock has trended higher in recent weeks with the stock up more than 5% over the last month, on stronger than expected top and bottom line results in Q1, record sales of its game Diablo IV, which crossed $666 million in five days and, approvals from numerous countries including Japan, China and South Korea.

New Deal: NexTier Oilfield Solutions Inc. (NEX) and Patterson-UTI Energy, Inc. (PTEN)

NexTier is an American land oilfield service company based in Houston, Texas. The company provides a wide range of well completion and production services in active and challenging basins. Patterson-UTI offers a comprehensive range of oilfield services and products to oil and natural gas exploration and production companies. The company operates primarily in the United States and other countries, providing services such as contract drilling, pressure pumping, and directional drilling.

We added NexTier as a potential deal in the works on June 12, 2023, when The Wall Street Journal reported that the two oil-field-services companies were discussing a deal that would create a larger entity in response to the ongoing consolidation within the industry.

The deal was finalized three days later on June 15, when the two companies entered into a definitive merger agreement to combine in an all-stock merger of equals transaction, with an enterprise value of approximately $5.4 billion. According to the terms outlined in the all-stock deal agreement, shareholders of NexTier will be entitled to receive 0.7520 shares of Patterson-UTI common stock for each share of NexTier common stock they own.

Transaction Overview


Merger Arbitrage activity decreased last week with one new deal announced and seven deals closing.

You can find all the active deals listed below in our Merger Arbitrage Tool (MAT) which automatically updates itself during market hours.

Merger Arbitrage

Deal Statistics:

Total Number of Deals Closed in 202382
Total Number of Deals Not Completed in 20235
Total Number of Pending Deals
Cash Deals40
Stock Deals19
Stock & Cash Deals5
Special Conditions4
Total Number of Pending Deals68
Aggregate Deal Consideration$695.15 billion

New Merger Arbitrage Deals:

  1. The merger of equals between NexTier Oilfield Solutions Inc. (NEX) and Patterson-UTI Energy, Inc. (PTEN), with an enterprise value of approximately $5.4 billion. Under the terms of the all stock deal agreement, NexTier shareholders will receive 0.7520 shares of Patterson-UTI common stock for each share of NexTier common stock owned. We added NEX as a potential deal on June 12, 2023, and the price at the time of the announcement was $8.21.

Deal Updates:

  1. June 12, 2023: According to Reuters, Broadcom (AVGO) is set to gain conditional EU antitrust approval for its proposed acquisition of VMware (VMW).
  2. On June 12, 2023, Focus Financial Partners (FOCS) announced that the special meeting of stockholders will be on July 14, 2023. The parties expect to receive Australian Clearance, Canadian Clearance, EC Clearance and FCA Approval later this year prior to the closing.
  3. June 14, 2023: Syneos Health (SYNH) and Star Parent, Inc. and their respective affiliates filed their HSR Act notifications on May 24, 2023. The 30-day HSR waiting period with respect to the Merger, is expected to expire on June 23, 2023.
  4. On June 15, 2023, Ironwood Pharmaceuticals (IRWD) and VectivBio Holding AG (VECT) announced that the waiting period under the HSR Act has expired.


  1. On June 9, 2023, the waiting period under the HSR Act, expired in connection with the previously announced merger between CTI BioPharma (CTIC) and Swedish Orphan Biovitrum AB.
  2. On June 12, 2023, Triton International Limited (TRTN) announced the expiration of the required waiting period under the HSR Act in connection with the proposed acquisition of Triton by Brookfield Infrastructure Partners (BIP).
  3. On June 14, 2023, HEXO Corp. (HEXO) announced that its shareholders approved the previously announced arrangement agreement with Tilray Brands.
  4. On June 15, 2023, Radius Global Infrastructure (RADI) announced that its shareholders approved the previously announced arrangement agreement with EQT and Public Sector Pension Investment Board.
  5. On June 16, 2023, UK’s Competition and Markets Authority (CMA) cleared Amazon’s (AMZN) purchase of Roomba maker IRobot (IRBT).
  6. On June 15, 2023, Arconic Corporation (ARNC) announced that the waiting period under the HSR Act with respect to its acquisition by by Apollo Global Management (APO) expired.
  7. On June 16, 2023, Ranger Oil Corporation (ROCC) announced that its shareholders voted in favor of all proposals associated with the previously announced merger with Baytex Energy Corp. (BTE).
  8. On June 16, 2023, shareholders of BELLUS Health (BLUapproved the company’s merger with GSK plc (GSK) at a special meeting of shareholders.


  1. On June 12, 2023, the Federal Trade Commission sued to block Microsoft (MSFT) from completing its deal to buy Activision Blizzard (ATVI), the latest antitrust challenge to the proposed merger.
  2. June 12, 2023: The International Brotherhood of Teamsters is formally opposing the merger of The Kroger Company (KR) and Albertsons Companies (ACI) currently under review at the FTC. The Teamsters represent more than 22,000 members across both companies’ stores, distribution centers, and manufacturing plants nationwide.
  3. June 13, 2023: Microsoft’s (MSFT) acquisition of Activision Blizzard (ATVI) was temporarily blocked by a federal judge in California who said a temporary restraining order was necessary to maintain the status quo while the Federal Trade Commission challenges the deal.
  4. On June 13, 2023, Flat Footed LLC, a significant shareholder of Diversified Healthcare Trust (DHC) with ownership of approximately 9.7% of the company’s outstanding common shares, raised concerns about the recent accumulation of shares by Adam D. Portnoy.
  5. June 14, 2023: According to a court filing, Microsoft (MSFT) and Activision (ATVI) are asking a federal judge to hold at least a five-day hearing on the Federal Trade Commission’s request for a preliminary injunction to block the videogame deal.
  6. On June 15, 2023, Orange Capital Ventures, LP, a New York-based investment firm, announced its intention to vote against the proposed merger of Global Net Lease (GNL) and Necessity Retail REIT (RTL).

Shareholders Meeting Schedule:

  1. Focus Financial Partners (FOCS) – July 14, 2023
  2. Arconic Corporation (ARNC) – July 25, 2023
  3. Spectrum Pharmaceuticals (SPPI) – July 27, 2023

Closed Deals:

  1. The acquisition of Credit Suisse Group AG (CS) by UBS Group AG (UBS) on June 12, 2023. It took 85 days for this deal to be completed.
  2. The acquisition of Heska Corporation (HSKA) by Mars, Incorporated on June 13, 2023. It took 71 days for this deal to be completed.
  3. The acquisition of Ruth’s Hospitality Group (RUTH) by Darden Restaurants (DRI) on June 14, 2023. It took 42 days for this deal to be completed.
  4. The acquisition of DCP Midstream (DCP) by Phillips 66 (PSX) on June 15, 2023. It took 160 days for this deal to be completed.
  5. The acquisition of Cvent Holding Corp. (CVT) by Blackstone on June 15, 2023. It took 93 days for this deal to be completed.
  6. The acquisition of Prometheus Biosciences (RXDX) by Merck (MRK) on June 16, 2023. It took 61 days for this deal to be completed.
  7. The acquisition of HV Bancorp (HVBC) by Citizens Financial Services (CZFS) on June 16, 2023. It took 240 days for this deal to be completed.

Weekly Spread Changes:

The table below shows weekly spread changes between June 9, 2023, and June 16, 2023.

Company Quote
Last Week
Spread Change
PTRS6.48LINKBANCORP, Inc. (LNKB)6.3612.87%6.11%6.76%All Stock
HEXO0.75Tilray Brands, Inc. (TLRY)1.56-9.48%-15.77%6.29%All Stock
AAIC4.21Ellington Financial Inc. (EFC)13.5216.22%11.02%5.20%All Stock
DM2.07Stratasys Ltd. (SSYS)17.393.33%-0.99%4.32%All Stock
DHC2.57Office Properties Income Trust (OPI)8.22-52.98%-56.40%3.42%All Stock
APGN0.491Pyxis Oncology, Inc. (PYXS)2.912.24%8.97%-6.73%All Stock
TSEM41.17Intel Corporation (INTC)36.3728.73%35.58%-6.85%All Cash
SAVE16.96JetBlue Airways Corporation (JBLU)8.0682.78%101.56%-18.78%All Cash
IRBT51Amazon (AMZN)125.4919.61%52.01%-32.40%All Cash
INFI0.238MEI Pharma, Inc. (MEIP)7.3159.71%111.35%-51.64%All Stock

Top 10 Merger Arbitrage Deals With The Largest Spreads:

Please do your own due diligence on deals with large spreads. Some of these large spreads might be related to regulatory issues or because of the way the deal is structured. We classify some of these deals as “special situation” deals in our merger arbitrage tool and provide additional details to help with the analysis. There may be unique situations related to special dividends, spinoffs, proration, etc. that need to be accounted for when looking at these spreads.

SAVE07/28/2022JetBlue Airways Corporation (JBLU)$31.00$16.9606/30/202482.78%79.94%
INFI02/23/2023MEI Pharma, Inc. (MEIP)$0.38$0.23806/30/202359.71%1816.31%
SIMO05/05/2022MaxLinear, Inc. (MXL)$105.43$69.9906/30/202350.63%1540.10%
BKI05/04/2022Intercontinental Exchange, Inc. (ICE)$75.62$57.3808/04/202331.78%246.82%
TSEM02/15/2022Intel Corporation (INTC)$53.00$41.1708/15/202328.73%180.83%
ACI10/14/2022The Kroger Co. (KR)$27.25$21.3703/31/202427.52%34.99%
IRBT08/05/2022Amazon (AMZN)$61.00$5108/05/202319.61%149.10%
FORG10/11/2022Thoma Bravo (N/A)$23.25$19.4606/30/202319.48%592.39%
AAIC05/30/2023Ellington Financial Inc. (EFC)$4.89$4.2112/31/202316.22%30.21%
ATVI01/18/2022Microsoft Corporation (MSFT)$95.00$81.9706/30/202315.90%483.51%

Deals In The Works

Eight new potential Merger Arbitrage deals were added to the ‘Deals In The Works‘ section last week.

  1. June 12, 2023: According to The Wall Street Journal, NexTier Oilfield Solutions (NEX) and Patterson-UTI Energy (PTEN) are holding talks over a possible merger.
  2. June 13, 2023: Investor AREX Capital Management pushes home health and hospice provider Enhabit (EHABto explore a sale.
  3. June 16, 2023: According to Reuters, nCino (NCNO), which offers cloud-based software to banks, is exploring its options, including a potential sale, after attracting takeover interest from private equity firms.
  4. June 16, 2023: According to Bloomberg, Abcam (ABCM), the biotechnology supplier has received multiple takeover approaches over recent weeks.


  1. Howard Jonas Consortium pushes LL Flooring (LL) to engage in the sale process with F9 Group.
  2. Nano Dimension (NNDM) reaffirms $18 per share tender offer for Stratasys (SSYS).
  3. According to Bloomberg, Petrobras (PBR) is not considering proposing an offer to buy out Brazilian petrochemical maker Braskem SA (BAK).
  4. Millicom (TIGO) announces that discussions with Apollo Global Management and Claure Group regarding a potential acquisition of all outstanding shares in Millicom have terminated.
  5. According to Reuters, English football club Manchester United (MANU) is negotiating granting exclusivity to the consortium led by Qatar’s Sheikh Jassim bin Hamad al-Thani in the talks to sell itself for more than $6 billion.

SPAC Arbitrage

Potential SPAC IPO

  1. On June 12, 2023, Bukit Jalil Global Acquisition 1 (BUJAU) filed for a $50M IPO.


  1. On June 13, 2023, ESH Acquisition Corp. (ESHAU) announced the pricing of a $100 million initial public offering.

SPAC Business Combination

  1. On June 13, 2023, LeddarTech Inc. and Prospector Capital Corp. (PRSR) announced their entry into a definitive business combination agreement that would result in LeddarTech becoming a publicly listed company.
  2. On June 15, 2023, Canna-Global Acquisition Corp (CNGL) announced the signing of a definitive Bid Implementation and Business Acquisition Agreement with Sydney-based New Quantum Holdings Pty Ltd.
  3. On June 16, 2023, AP Acquisition Corp (APCA) entered into a definitive business combination agreement with JEPLAN, Inc.
  4. On June 16, 2023, Global Star Acquisition Inc. (GLST) announced that it has entered into a merger agreement with K Enter Holdings Inc.


  1. On June 16, 2023, Metals Acquisition Limited (MAC) and Glencore closed the purchase and sale of Glencore’s 100% interest in Cobar Management Pty Ltd (CMPL). MAC’s ordinary shares and warrants will commence trading on June 16, 2023, under the ticker symbols (MTAL) and “MTAL.W”, respectively.


  1. On June 8, 2023, Malacca Straits Acquisition Company Limited (MLAC) announced that (i) Malacca, Indiev, Inc and certain other parties have mutually agreed to terminate their previously announced Agreement and Plan of effective as of June 8, 2023.
  2. On June 8, 2023, Mountain Crest (MCAGreceived a termination notice from AUM. The Notice terminates the Business Combination Agreement as of June 8, 2023.
  3. On June 15, 2023, Plum Acquisition Corp. I (PLMI) and Sakuu Corporation have terminated their mutual agreement.
  4. On June 16, 2023, Welsbach Technology Metals Acquisition Corp. (WTMA) and WaveTech Group, Inc. collectively reached a decision to discontinue the previously announced merger discussions.

List of all pending Merger Arbitrage deals:

Disclaimer: I have long positions in Activision Blizzard (ATVI), Spirit Airlines (SAVE) and Tower Semiconductor (TSEM). Please do your own due diligence before buying or selling any securities mentioned in this article. We do not warrant the completeness or accuracy of the content or data provided in this article.