Game on! Microsoft closes £60bn Activision deal as regulators hint at compromise
Microsoft is one step closer to securing its £60bn acquisition of Activision Blizzard after a US court gave the green light to the deal and UK regulators offered new hope.
A US judge has rejected the Federal Trade Commission’s attempt to stop the deal, rejecting arguments that the collaboration would significantly reduce competition in the gambling market.
The acquisition would be the largest 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 failed to demonstrate that it is likely to succeed in its claim that the combined company is likely to pull Call Of Duty from Sony PlayStation, or that ownership of Actvision content will significantly undermine competition in the video game library subscription and cloud gaming markets. will decrease. ,” Judge Jacqueline Scott Corley wrote in her decision.
Gaming deal: A US judge has rejected the Federal Trade Commission’s attempt to stop Microsoft’s £60 billion acquisition of Activision Blizzard
Shares in Activision soared 10.06 percent in New York after the update — and shortly after the ruling, Britain’s competition watchdog said it was open to discussions, having previously opposed the deal.
The Competition and Markets Authority (CMA) had blocked it in April, after concluding it would lead to ‘less innovation and less choice for UK gamers’.
It was seen as a big step for the CMA, which was not known for baring its teeth like this.
The watchdog was particularly concerned that the US tech giant could put a stranglehold on cloud gaming – the streaming of games over the internet.
The decision put it at odds with European regulators, who said the deal could go through a month later.
But in a statement last night, the CMA said it was “ready to consider any proposals from Microsoft to restructure the transaction in a manner that would address concerns raised in our final report.”
Both companies planned to appeal the decisions and hearings were set to begin at a tribunal on July 28.
Brad Smith, president of Microsoft, said: “Following today’s court ruling in the US, we are now turning our focus back to the UK.
“While we ultimately disagree with the CMA’s concerns, we are considering how the transaction can be modified to address those concerns in a manner acceptable to the CMA.”
Smith had previously criticized the CMA’s decision, saying the UK was ‘closed on business’.
Bobby Kotick, CEO of Activision Blizzard, said: “We are optimistic that today’s ruling indicates a path to full regulatory approval.”
The Federal Trade Commission has until Friday to appeal the US decision. The deal would be the largest for Microsoft and the largest in the history of the video game business.
RBC Capital Markets analyst Rishi Jaluria said it would make Microsoft the world’s third-largest gaming company and “clearly the market didn’t expect that and that’s why Activision’s stock is up.”
FTC spokesperson Douglas Farrar said it was “disappointed… given the clear threat this merger poses to open competition in cloud gaming, subscription services and consoles. We will announce our next step to continue our fight to maintain competition and protect consumers.