2023-09-22 06:37:00
Update (09/22/2023) – GS
After almost two years, the soap opera regarding the merger between Activision Blizzard and Microsoft may finally be coming to an end. Since the deal was announced in January 2022, the companies have faced strong opposition from competitors and some regulators around the world.
In early July, Microsoft won its case once morest the US Federal Trade Commission, which left the way clear for the deal to be approved in the United States, thus leaving the UK’s Competition and Markets Authority as the only major opposition for the merger to be completed.
Also in July, the CMA decided to postpone its decision on the merger until the end of August, but only this week did we get updates on the case.
The British body announced preliminary approval for Microsoft to proceed with its US$69 billion deal with Activision Blizzard. The CMA originally blocked the acquisition due to concerns regarding the cloud gaming market, but Microsoft recently restructured the deal to transfer cloud gaming rights for current and new Activision Blizzard games to Ubisoft.
The CMA considers that the restructured deal makes important changes that substantially address the concerns it outlined in relation to the original transaction earlier this year, opening the door to approval of the deal.
This is just a preliminary decision before final approval. The CMA says it has now opened a consultation to obtain third-party feedback on Microsoft’s proposed solutions, until October 6th. A final decision is expected before the deadline of October 18th.
The consultation period is intended to address some remaining concerns the CMA has with the agreement. “Although the CMA identified limited residual concerns with the new agreement, Microsoft presented solutions that the CMA tentatively concluded should resolve these concerns.”
Brad Smith, vice president of Microsoft, commented on the CMA’s preliminary decision on his Twitter and was confident.
We are encouraged by this positive development in the CMA review process. We have presented solutions that we believe fully address the CMA’s remaining concerns related to cloud game streaming and will continue to work to gain approval to close the deal before the October 18 deadline.
We are encouraged by this positive development in the CMA’s review process. We presented solutions that we believe fully address the CMA’s remaining concerns related to cloud game streaming, and we will continue to work toward earning approval to close prior to the October 18…
— Brad Smith (@BradSmi) September 22, 2023
Bobby Kotick, CEO of Activision Blizzard, also shared a statement regarding the preliminary decision and was very confident of full approval.
Our CEO Bobby Kotick shared an update on the CMA’s preliminary approval of our deal with @Microsoft.
— Activision Blizzard (@ATVI_AB) September 22, 2023
For now, we can only wait for final approval, but at this point in the championship, we can say that Activision Blizzard already belongs to Microsoft.
Original text – 07/19/2023
Xbox and Activision Blizzard: Microsoft delays merger to seek CMA approval in UK
Microsoft has just announced that it has postponed its merger with Activision Blizzard. The decision was made following the denial of the FTC’s appeal in the US, which brought the completion of the purchase closer than ever. However, Phil Spencer has a good justification for this move.
Together with @Activisionwe are announcing the extension of our merger agreement to 10/18 to provide ample time to work through the final regulatory issues. We will honor all commitments agreed upon with the EC and other regulators and continue to work with the CMA on the…
— Brad Smith (@BradSmi) July 19, 2023
The case is that Microsoft wants to give it more time to negotiate with the UK Competition and Markets Authority (CMA) and gain its approval for the merger. This way, postpone the merger to October 18 will give three more months to argue, as this is one of the last obstacles to completing the acquisition of Activision Blizzard.
Microsoft and Activision Blizzard have extended the merger agreement deadline to 10/18. We’re optimistic regarding getting this done, and excited regarding bringing more games to more players everywhere.
— Phil Spencer (@XboxP3) July 19, 2023
But the additional deadline is not the only change made to the process. The fine for withdrawing from the acquisition will also increase from US$3.5 billion to US$4.5 billion from September 15, 2023.
The CMA also clarifies that Microsoft has not yet delivered the final version of the new proposal, which means that we will have to wait longer for it to say whether or not it approves the new terms.
Update on Activision Blizzard’s merger with Microsoft: agreement deadline extended
The recent decision in the U.S. and approvals in 40 countries all validate that the deal is good for competition, players, and the future of gaming.
Given global regulatory approvals and the…
— Lulu Cheng Meservey (@lulumeservey) July 19, 2023
Considering that the CMA said it would announce its decision regarding the merger by August 29th before Microsoft’s proposed changes today, it is highly likely that the final verdict will be issued by it only in October, when the deadline is approaching.
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#Microsoft #preliminary #approval #acquisition #Activision #Blizzard
