A federal appeals court said it will not block Microsoft from closing its $69 billion acquisition of Activision Blizzard, handing the Federal Trade Commission its second major defeat this week in a case involving the future of the video game industry.

The decision by the US Court of Appeals for the Ninth Circuit is a blow to antitrust officials who had requested an emergency injunction of a lower court ruling from Tuesday allowing the deal to close.

The combination is set to make Microsoft the world's third-largest video game publisher after Tencent and Sony. Under the terms of the deal, Microsoft has until July 18 to consummate the merger, though the two companies involved could mutually seek to extend the deadline.