The $69 billion takeover is likely to proceed, with revised plans addressing regulatory worries.
Microsoft’s $69 billion acquisition of Activision Blizzard, known for games like Call of Duty and World of Warcraft, appears poised for approval by the UK’s competition regulator. The Competition and Markets Authority (CMA) initially opposed this record-breaking tech deal in April due to fears of Microsoft’s potential dominance in the emerging cloud gaming sector.
This decision deeply frustrated Microsoft, which described it as the bleakest moment in its four decades of operating in the UK. However, a modified proposal was subsequently submitted, which included the sale of cloud gaming rights beyond Europe to the French competitor Ubisoft.
On Friday, the CMA declared that the sale of these rights “effectively addresses prior concerns and paves the way for approval of the deal.”
The regulatory body did, however, mention that it still had “limited remaining reservations” regarding potential loopholes, terminations, or non-enforcement in the sale of Activision’s cloud streaming rights. In response to these concerns, Microsoft has offered to grant the CMA authority to enforce the terms of the rights sale, a move the UK regulator has tentatively determined will resolve its last concerns.
Colin Raftery, the senior director of mergers at the CMA, stated, “This represents a fresh and significantly altered agreement, ensuring that the distribution of these vital games via cloud remains in the hands of a robust independent provider, Ubisoft, instead of coming under Microsoft’s control. With additional safeguards to guarantee the deal’s proper execution, this will maintain market structure, enabling open competition to shape the future of cloud gaming for years to come. It also offers UK gamers various avenues to access Activision’s games, including through cloud-based multi-game subscription services.
The CMA has initiated a consultation on the proposed solutions, concluding on October 6, before rendering a definitive verdict on the deal’s approval.
The UK regulatory body had seemed progressively isolated in its stance opposing the acquisition, given that its EU counterparts had approved the deal and the US competition regulator had failed in its court attempt to halt it.
On Friday, the CMA rebuked Microsoft for its delayed response in providing a viable remedy to competition concerns earlier in the investigation phase.
Microsoft has expressed its desire for the CMA’s assessment of its revised deal to conclude before the expiration of the acquisition agreement with Activision Blizzard on October 18.
To address regulatory concerns, the company had already extended the timeframe for finalizing the deal, which surpasses its prior largest acquisition, the $26 billion takeover of LinkedIn in 2016. This extension originally set the deadline for completion at July 18.
