Merger and Acquisition

FTC Files Order in US Court to Restrain Microsoft From Acquiring Blizzard

The Federal Trade Commission (FTC) has filed an order in a U.S. court to restrain Microsoft’s proposed $69 billion acquisition of Activision Blizzard from going through.

Published

11 months ago

June 13, 2023

Investors King

The Federal Trade Commission (FTC) has filed an order in a U.S. court to restrain Microsoft’s proposed $69 billion acquisition of Activision Blizzard from going through.

The FTC’s recent filing is coming after it had filed a legal challenge in December last year to block Microsoft’s acquisition of Activision Blizzard and is now seeking a temporary restraining order and injunction from a US Federal District Court.

The 34-page lawsuit filed by the FTC, reads in part, “Both a temporary restraining order and a preliminary injunction are necessary because Microsoft and Activision have represented that they may consummate the proposed acquisition at any time without any further notice to the commission.

“A preliminary injunction is necessary to maintain the status quo and prevent interim harm to competition during the pendency of the FTC’s administrative proceeding to determine whether the proposed acquisition violates U.S antitrust law. A temporary restraining order is necessary to maintain the status quo while this court decides whether to grant the requested preliminary injunction”.

Reports reveal that the FTC filed for an injunction in an attempt to halt the deal before the July 18 deadline, as it is concerned Microsoft may be preparing to close its acquisition regardless of the block. It is understood that European regulators have given the deal a go-ahead last month, which suggests that Microsoft could continue with its acquisition despite an injunction in the U.S. preventing the deal from closing.

Following the filing, the US judge will now need to decide on issuing a temporary restraining order to restrict Microsoft from closing the deal for two weeks and a preliminary injunction that would prevent Microsoft from closing until the result of the FTC legal challenge. An evidentiary hearing is scheduled for August 2nd, shortly after Microsoft’s appeal hearing is scheduled.

Investors King understands that if the FTC’s injunction is unsuccessful, Microsoft will not hesitate to fast-track the deal

Speaking on the lawsuit filed by the FTC, Activision Blizzard CEO Bobby Kotick emailed his employees Monday, describing the FTC’s action as “a positive development in our merger process.” Moving the case to federal court “accelerates the legal process,” he wrote, noting that the company’s excellent legal team has been, preparing for this move for more than a year.

Kotick suggests the merger will support its hundreds of millions of players, protect American workers, increase shareholder value, and enable the two companies to more effectively compete against the global competitors that dominate the video game industry around the world.

Why is the FTC Against Microsoft From Acquiring Blizzard

It is a well-known fact that Microsoft and Sony control the market for high-performance video game consoles. The number of independent companies capable of developing standout video games for those consoles has contracted, with only a small group of firms commanding that space today.

Microsoft now proposes to acquire Activision, one of the most valuable of those developers, in a vertical merger valued at nearly $70 billion that will increase Microsoft’s already considerable power in video games. Therefore, the FTC suggests that if the deal goes through, would give the computer giant an unfair advantage over rivals.

With control of Activision’s content, Microsoft would have the ability and increased incentive to withhold or degrade Activision’s content in ways that substantially lessen competition- including competition on product quality, price, and innovation. This loss of competition according to the FTC, would likely result in significant harm to consumers in multiple markets at a pivotal time for the industry.

Meanwhile, Microsoft insists that taking over Activision would be advantageous for both the gaming industry and gamers and has even offered to put its name to a legal document that promises the availability of games like Call of Duty to other consoles for a decade.

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Merger and Acquisition

Nigerian Exchange Group Plc Acquires 5% Stake in Ethiopian Securities Exchange

Published

3 weeks ago

April 8, 2024

Samed Olukoya

Nigerian Exchange Limited - Investors King

Nigerian Exchange Group Plc (NGX) has announced the acquisition of a 5% stake in the Ethiopian Securities Exchange (ESX).

The investment marks a significant milestone for NGX as it seeks to bolster its capital-market activities in East Africa and beyond.

The Lagos-based NGX, formerly known as the Nigerian Stock Exchange, revealed that it participated in a capital-raising exercise alongside institutional investors such as FSD Africa and Trade and Development Bank Group.

While the exact amount of NGX’s investment remains undisclosed, the company indicated that the percentage shareholding could potentially increase to 10% pending approval by NGX’s board.

NGX’s decision to invest in ESX aligns with its broader strategic objectives of facilitating cross-border investment flows, enhancing liquidity, and promoting economic development across the continent.

Temi Popoola, Chief Executive Officer of NGX, emphasized the significance of strategic partnerships and investments in driving growth and fostering collaboration within the African capital markets landscape.

The move comes as NGX transitions from a mutual company owned by stockbrokers to an organization held by shareholders. In 2021, NGX listed its shares on the NGX All Share Index, a move aimed at enhancing access to funding and expanding its capital-market operations both domestically and internationally.

Commenting on the investment in ESX, NGX highlighted its confidence in the potential of Ethiopia’s rapidly growing economy and capital market. By acquiring a stake in ESX, NGX seeks to leverage its expertise and resources to contribute to the development of Ethiopia’s financial sector while also tapping into new growth opportunities.

Following the capitalization of ESX, the Ethiopian government retains a 25% shareholding in the exchange. NGX’s investment not only strengthens its presence in East Africa but also underscores its commitment to fostering collaboration and partnerships across the African continent.

As part of the investment agreement, Temi Popoola, NGX’s CEO, is set to join ESX’s board, further solidifying the ties between the two exchanges.

This move is expected to facilitate greater collaboration and knowledge sharing, ultimately benefiting investors and market participants in both Nigeria and Ethiopia.

With NGX’s acquisition of a stake in ESX, the African capital markets landscape stands to witness increased integration and collaboration, paving the way for enhanced liquidity, deeper market penetration, and accelerated economic growth across the continent.

As NGX continues to expand its reach and influence, its investment in ESX marks a significant step forward in its journey towards becoming a leading player in the African financial ecosystem.

Merger and Acquisition

Canal+ Makes Bold $2.9 Billion Offer for MultiChoice, Eyes African Expansion

Published

3 weeks ago

April 8, 2024

Samed Olukoya

Canal+, a subsidiary of Vivendi SE, has formally tabled a $2.9 billion all-cash offer for MultiChoice Group Ltd., a major South African broadcaster.

This move comes as part of Canal+’s broader strategy to bolster its presence on the continent by leveraging MultiChoice’s extensive reach and resources.

The offer, which values MultiChoice’s shares at 125 rand ($6.7) apiece, represents a significant milestone in Canal+’s pursuit of expansion opportunities in Africa.

MultiChoice, in a filing jointly made with Canal+, confirmed the offer, which will now be subject to review by a newly constituted independent board of MultiChoice.

This bid represents Canal+’s commitment to navigate the complexities of South Africa’s regulatory environment, particularly concerning foreign media ownership restrictions.

Reports suggest that discussions are underway involving South African billionaire Patrice Motsepe, indicating potential collaboration to facilitate the deal.

Canal+ has expressed its intent to not only acquire existing MultiChoice shares but also reserve the right to purchase additional shares in the market. If acquired at prices exceeding the initial offer, Canal+ has committed to adjusting the bid price accordingly.

The French media conglomerate’s interest in MultiChoice dates back to 2020 when it began acquiring shares, ultimately surpassing the 35% ownership threshold this year, thereby triggering a mandatory takeover offer.

Vivendi has identified Africa as a key growth market, given its burgeoning population and economic potential. The proposed acquisition of MultiChoice aligns with Vivendi’s broader strategy to capitalize on high-growth regions.

MultiChoice, founded in South Africa in 1985 and subsequently expanded across the continent, has emerged as a prominent player in the African media landscape. Its spin-off from Naspers Ltd. in 2019 paved the way for independent operations and strategic partnerships.

The potential merger of Canal+ operations with MultiChoice could create a media powerhouse boasting nearly 50 million subscribers across the continent.

This consolidation could facilitate increased investments in local content production and sports broadcasting, catering to diverse audiences and enhancing cultural representation.

While the offer awaits deliberation by MultiChoice’s board, industry analysts anticipate robust discussions considering the significant implications for both companies and the broader African media industry. If successful, Canal+’s bid for MultiChoice could reshape the African media landscape, ushering in a new era of competition and innovation in the sector.

Merger and Acquisition

Access Bank Plc to Acquire National Bank of Kenya Limited in Landmark Deal

Published

1 month ago

March 20, 2024

Samed Olukoya

Access Bank PLC, a leading financial institution based in Nigeria, has unveiled plans to acquire National Bank of Kenya Limited (NBK) in a landmark deal.

The acquisition announced by Access Holdings Plc, the flagship subsidiary of Access Bank, signifies a significant move in the bank’s African expansion strategy.

Under the binding agreement, Access Bank will acquire the entire issued share capital of NBK from Kenyan-based KCB Group Plc (KCB), which also serves as the holding company of KCB Bank Ltd, Kenya’s largest commercial bank.

This strategic transaction is aimed at repositioning Access Bank as a prominent player in the Kenyan market and establishing it as a regional hub for the East African bloc.

The deal with NBK, known for its strong presence and substantial balance sheet exceeding US$1.1 billion, presents an enticing opportunity for Access Bank to expand its footprint in the East African market.

The completion of the transaction is subject to regulatory approvals from the Central Bank of Nigeria and the Central Bank of Kenya.

Upon finalization, NBK will be integrated with Access Bank Kenya Plc to form an enlarged franchise, advancing Access Bank’s strategic objectives for the Kenyan and East African markets.

Commenting on the Transaction, Ms. Bolaji Agbede, Acting Group Chief Executive Officer of Access Holdings Plc said: “This proposed acquisition marks a significant step in the execution of our five-year strategic plan aimed at positioning the Bank as Africa’s Gateway to the World. The deal with NBK, a historically strong and well-known bank in Kenya with a balance sheet in excess of US$1.1 billion, presents a compelling opportunity to scale up our growth in the East African market. We remain confident that our investments towards diversifying and strengthening the Bank’s long-term earnings profile will deliver significant value for our shareholders, customers, and wider stakeholder groups.”