Update: After a protracted period of contention and changes to the nature of its cloud gaming plans in the UK to appease the nation’s Competition and Markets Authority (CMA), Microsoft has finally secured the win it was looking for in its bid to acquire Activision Blizzard to the tune of $69 billion USD.
After tentatively approving the deal last month, the CMA has made its final decision and given Microsoft the appropriately-green light.
“The CMA has decided to give Microsoft Corporation (Microsoft) consent to acquire Activision Blizzard, Inc. (Activision) (the Parties) excluding Activision’s cloud streaming rights outside of the European Economic Area (EEA) (the Merger) subject to the condition that the sale of Activision’s cloud streaming rights completes prior to completion of the Merger,” the CMA said in its decision statement.
Microsoft is now confident that its deal will be finalised shortly, with Vice Chair and President, Brad Smith, saying “We’re grateful for the CMA’s thorough review and decision today. We have now crossed the final regulatory hurdle to close this acquisition, which we believe will benefit players and the gaming industry worldwide.”
We’re grateful for the CMA’s thorough review and decision today. We have now crossed the final regulatory hurdle to close this acquisition, which we believe will benefit players and the gaming industry worldwide.
Activision Blizzard CEO, Bobby Kotick, also sent an email out to employees today celebrating the news, which reads:
Today the CMA, the regulatory authority in the UK, approved our transaction with Microsoft.
We now have all regulatory approvals necessary to close and we look forward to bringing joy and connection to even more players around the world.
Our board chair Brian Kelly and I are incredibly proud of all of you and your accomplishments over the last four decades. We’re excited for our next chapter together with Microsoft and the endless possibilities it creates for you and for our players.
We’ll be sure to update this story once more and for hopefully the final time when this is all tied up.
It looks as though that one detail has made all of the difference, with the CMA announcing that Microsoft has satisfactorily address the UK body’s concerns with the deal now that it’s in less of a position to dominate the burgeoning cloud gaming market with exclusive control of Activision Blizzard content.
Colin Raftery, senior director of mergers at the CMA, said, “This is a new and substantially different deal, which keeps the cloud distribution of these important games in the hands of a strong independent supplier, Ubisoft, rather than under the control of Microsoft.”
“With additional protections to make sure that the deal is properly implemented, this will maintain the structure of the market, enabling open competition to continue to shape the development of cloud gaming in the years to come, and giving UK gamers the opportunity to access Activision’s games in many different ways, including through cloud-based multigame subscription services.”
The CMA has now opened a consultation, which will run until October 6th, on Microsoft’s proposed remedies to address some remaining residual concerns. The CMA has also launched a separate consultation to inform its final decision on whether to grant Microsoft permission to buy Activision, which runs up until the same date.
Original Story: Guess what we’re discussing today? If you guessed “anything other than Xbox’s $69 billion USD Activision Blizzard acquisition” you’d be very wrong.
Following recent developments in the US where the FTC has all but lost its case in attempting to delay or block the buyout, and Sony has come to the table to sign a 10-year agreement to keep Call of Duty on its platform, things over at the CMA in the UK have also begun to shift.
Originally scheduled to hear an appeal from Microsoft over its decision to block the deal in the UK, the CMA has reportedly made a joint submission with Microsoft and Activision to the Competition Appeal Tribunal (I’ve lost count of how many courts, tribunals and other formal hoops have been jumped through at this point) to put that all on ice and reach an agreement out of court. The CAT has since agreed to put a two-month pause on proceedings with the CMA saying it would reconsider the deal if a modified version of terms was put to it by Microsoft (thanks Reuters).
A CMA lawyer has been quoted as telling the tribunal, “Based upon the discussion to date, both sides – Microsoft and the CMA – have confidence that Microsoft notifying a restructured transaction is capable of addressing the concerns that the CMA has identified.”
Bloomberg also reports that the whole deal itself is set to be tied up later than planned, with Microsoft and Activision Blizzard obviously incredibly unlikely to have closed it by the original July 18th deadline. As per the original terms, this was the date when both parties could walk from the deal and Microsoft would be up for a $3 billion USD payment to Activision should the buyout be terminated. According to unnamed sources, both parties are apparently keen to continue to seek regulator approval before finalising the deal.
Microsoft and Activision Blizzard are nearing the finish line on their $69 billion deal, but aren’t likely to close it by a Tuesday deadline https://t.co/DuWR5iq2TD