Microsoft’s ambitious $69 billion acquisition of gaming giant Activision Blizzard is one step closer to realization. The UK’s Competition and Markets Authority (CMA) has granted preliminary approval for the deal. The CMA had initially raised concerns over cloud gaming when the acquisition was first proposed. This prompted Microsoft to revise its offer.
Restructured Deal Helps Win Approval
Under the restructured deal, cloud gaming rights for both current and future Activision Blizzard games will be transferred to French video game publisher Ubisoft. This alleviates the CMA’s apprehensions. The CMA released a statement expressing satisfaction with the changes, stating that they “substantially address the concerns” previously raised. This preliminary decision sets the stage for the deal to move forward. A final ruling is expected before the extended October 18th deadline.
To ensure transparency and gather input from third parties, the CMA has initiated a consultation period running until October 6th. This period will address any lingering concerns the CMA has with the deal. They have provisionally concluded that Microsoft’s proposed remedies should adequately resolve these issues.
Both Microsoft and Activision Blizzard have welcomed the CMA’s response. Microsoft’s Vice Chair and President, Brad Smith, expressed optimism. He stated that they believe their solutions have addressed the CMA’s remaining concerns regarding cloud game streaming. Activision Blizzard CEO Bobby Kotick also expressed satisfaction with the CMA’s decision and praised their collaborative efforts with regulators.
One Last Hurdle to Clear
This decision by the UK’s regulatory authority represents the final hurdle for Microsoft’s deal. The deal has faced scrutiny from regulators around the world since it was first announced in January 2021. Despite the challenges and delays incurred during the regulatory process, Microsoft remains hopeful. They believe that the acquisition will stimulate demand for its Xbox console and gaming subscription business.
The CMA’s CEO, Sarah Cardell, noted that while the revised terms are a positive step, it would have been preferable if Microsoft had presented these changes during the initial investigation. Nevertheless, with preliminary approval in hand, Microsoft is now focused on obtaining the CMA’s final approval before the October 18th deadline. This decision holds significant implications for the global progress of the deal. It marks a crucial milestone in the journey toward completing this landmark merger.