Microsoft’s Activision deal set to get OK from UK’s antitrust watchdog
MICROSOFT got a huge boost in its attempt to clear the final global regulatory hurdle for the US$69 billion Activision Blizzard deal, after the UK’s antitrust watchdog said the revised deal offer from the tech giant appeared to address its concerns.
The Competition and Markets Authority (CMA) said on Friday (Sep 22) that it will consult on the new offer, but Microsoft’s proposal opens the door to the deal being cleared. The new proposal offered to sell some gaming rights to French publisher Ubisoft Entertainment.
The move represents a stunning turnaround for a deal that was once thought over, after it ran into concerns from some antitrust watchdogs. It gained unexpected momentum after Microsoft beat the Federal Trade Commission’s court challenge over the deal.
The European Union cleared the deal with behavioural remedies in May. That left the CMA, which blocked the transaction in April, as the remaining hurdle.
“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,” said Colin Raftery, senior director of mergers at the CMA.
The deal provides Xbox chief Phil Spencer the cornerstone to a plan to boost Microsoft’s lagging mobile games business, although this comes months later than the company had hoped. He must now execute on a strategy he unveiled around the deal in January 2021, in a landscape where the market has shifted, including the receding focus on the metaverse, which Microsoft originally listed as a driver of the acquisition.
Microsoft executive Brad Smith said the firm will continue to work towards winning final approval to close the deal by Oct 18.
“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,” he added. BLOOMBERG
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