2023-09-22 12:50:47
Microsoft, owner of Xbox, is close to finalizing its $69 billion takeover of video game factory Activision Blizzard, publisher of “Call of Duty,” “Diablo” and “Candy Crush,” following a preliminary green light from London.
• Read also: Microsoft submits a largely revised takeover offer for Activision in London
This $69 billion mega buyout is part of Microsoft’s very expensive bet to strengthen its position in gaming and help its successful Xbox console compete with Sony’s PlayStation.
The British competition authority, the CMA, announced on Friday that it was giving a provisional green light to the new acquisition agreement by the American giant Microsoft of Activision Blizzard.
The CMA reports in a press release “limited residual concerns”, for which Microsoft “has proposed solutions” which should resolve them.
“This merger might only go ahead if competition, innovation, and choice in online games were preserved,” commented Sarah Cardell, the director general of the British police force.
“In response to our initial ban, Microsoft has now substantially revised this agreement and taken the necessary steps to address our concerns,” it adds.
The CMA says it has opened a consultation until October 6 on the changes proposed by Microsoft.
Microsoft Vice President Brad Smith reacted Friday on the social network Twitter, saying he was “encouraged by these positive advances in the CMA review process.”
“FIG leaf”
“This (provisional) approval from the CMA is crucial to finalizing our merger,” added Activision CEO Bobby Kotick.
The technology giant submitted an amended version of its takeover project for Activision Blizzard to the British authority a month ago, finally hoping for a green light following the refusal it received in April.
Microsoft notably planned in the new version of its colossal takeover project notable transfers: the online gaming rights of Activision Blizzard – including those of the global successes “Call of Duty” and “Candy Crush” – will be sold to the French company Ubisoft .
The CMA feared that the operation in its initial format would reduce competition too much in the dematerialized games market.
The blow it brought to an end at the end of April to this mega-operation had triggered the ire of Microsoft, with Brad Smith decrying the “darkest day of four decades (of Microsoft) in Great Britain” and adding that this shook the American giant’s “confidence” in Britain as a welcoming land for technology companies.
The European Commission, for its part, approved this acquisition in May.
Jonathan Compton, competition lawyer at DMH Stallard, notes that the CMA is the “last of the ‘big three’ regulators to approve this deal.”
“The green light from the EU in May and the stopping of the opposition from the American FTC had” isolated the CMA in its standoff with Microsoft, he adds.
According to him, the proposed changes are a “fig leaf” and “many in the competition law sector will wonder whether the changes to the structure of the revamped agreement really address the CMA’s original concerns “.
In particular, despite the transfer to Ubisoft of the sales rights on Microsoft’s streaming games, there remain for the latter “many ways of controlling Activision’s network games.”
Alex Haffner, another lawyer specializing in competition issues, and associate partner at Fladgate, judges that if the green light is finalized, “both parties will have – at least publicly – achieved their desired objective”.
The CMA gave interested parties “two weeks to comment on the solutions proposed (by Microsoft, editor’s note) before making its final decision known, but it now seems inevitable that the agreement will receive full approval.”
Microsoft and Activision Blizzard had pushed back the deadline for the acquisition in July to October 18, an additional deadline which should allow them to overcome the last regulatory obstacles, particularly in the United Kingdom.
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