Game On! Microsoft closes in on £60bn Activision deal as regulators hint at compromise
Microsoft is one step closer to securing its £60 billion acquisition of Activision Blizzard after a US court gave the deal the green light and UK regulators offered new hope.
A US judge has rejected the Federal Trade Commission’s attempt to halt the deal, dismissing arguments that the merger would substantially reduce competition in the gaming market.
The acquisition would be the biggest in the gaming world and would mean Microsoft, the company behind Xbox consoles, would own popular Activision titles including Call Of Duty and Crash Bandicoot 4.
The Federal Trade Commission has not shown that it is likely to succeed in its assertion that the combined company will likely pull Call Of Duty from Sony PlayStation, or that its ownership of Activision content will substantially reduce competition in library subscription markets. of video games and games in the cloud. ‘ wrote Judge Jacqueline Scott Corley in her decision.
Gaming settlement: A US judge has rejected the Federal Trade Commission’s attempt to stop Microsoft’s £60bn takeover of Activision Blizzard
Activision’s shares soared 10.06% in New York following the update, and shortly after the ruling, the UK’s competition watchdog said it was open to discussions, having previously opposed the deal. .
The Competition and Markets Authority (CMA) blocked it in April after concluding it would lead to “reduced innovation and less choice for UK players”.
It was seen as a big step for the CMA, which was not known for baring its teeth in such a way.
The watchdog was particularly concerned that the US tech giant could gain a stranglehold on cloud gaming – streaming games over the internet.
The decision put him at odds with European regulators, who said the deal could go ahead in a month.
But in a statement last night, the CMA said it was “ready to consider any proposal from Microsoft to restructure the transaction in a way that addresses the concerns set out in our final report.”
Both companies had planned to appeal against the decisions, and hearings were scheduled to begin in court on July 28.
Brad Smith, Chairman of Microsoft, said: ‘Following today’s court decision in the US, our focus now turns to the UK.
“While we ultimately disagree with the CMA’s concerns, we are considering how the transaction might be modified to address those concerns in a way that is acceptable to the CMA.”
Smith had previously criticized the CMA’s decision, saying it left the UK “closed to the public”.
Bobby Kotick, CEO of Activision Blizzard, said: “We are optimistic that today’s ruling marks a path toward full regulatory approval.”
The Federal Trade Commission has until Friday to appeal the decision in the United States. The deal would be the biggest for Microsoft and the biggest in the history of the video game business.
RBC Capital Markets analyst Rishi Jaluria said it would make Microsoft the world’s third-biggest gaming company and “the market clearly didn’t expect that and so Activision’s stock rose.”
FTC spokesman Douglas Farrar said he was “disappointed… given the clear threat this merger poses to open up competition in cloud gaming, subscription services and consoles.” We will be announcing our next step to continue our fight to preserve competition and protect consumers.’