Videogame maker Activision Blizzard Inc. has announced an agreement with software giant Microsoft Corp. to extend the merger deadline by three months to Oct. 18.
Termination Fees
Under the new agreement, the potential termination fee payable to Activision has been increased to $3.5 billion from $3.0 billion if the deal is terminated after Aug. 29, and to $4.5 billion if it is terminated after Sept. 15.
Cash Dividend
In addition, Activision has declared a cash dividend of 99 cents. Shareholders of record on Aug. 2 will receive the dividend on Aug. 17.
Merger Approval
The companies initially agreed in January 2022 that Microsoft would acquire Activision. The merger has received approval from a U.S. federal judge last week, and European Union regulators approved the deal in May.
Strong Financial Results
Separately, Activision reported strong second-quarter performance with a significant increase in net income. The net income rose to $587 million, or 74 cents a share, compared to $280 million, or 36 cents a share, in the year-ago period.
Adjusted Earnings Exceed Expectations
Excluding nonrecurring items, adjusted earnings per share reached 91 cents, surpassing the FactSet consensus of 88 cents.
Revenue Growth
Revenue also witnessed substantial growth, increasing by 34.2% to $2.21 billion, although slightly below the FactSet consensus of $2.38 billion.