Microsoft’s $69 billion acquisition of Activision Blizzard has finally got preliminary approval from the UK’s Competition and Markets Authority (CMA).
Due to worries that the deal might hurt competition in cloud gaming in the UK, the CMA earlier this year blocked Microsoft from acquiring Activision in its entirety. Microsoft proposed a restructured agreement for the CMA to consider in August after that deal was rejected. According to that new agreement, Microsoft will provide Ubisoft the cloud gaming rights for all future and existing Activision Blizzard titles.
“The CMA considers that the restructured deal makes important changes that substantially address the concerns it set out in relation to the original transaction earlier this year,” the CMA said in a statement.
“The sale of Activision’s cloud gaming rights to Ubisoft substantially addresses previous concerns and opens the door to the deal being cleared,” the CMA said today.
Following the preliminary approval, the CMA will now gather feedback from third-parties till October 6th, before making a final decision, which is expected on October 18th.
Activision Blizzard said in a statement: “The CMA’s preliminary approval is great news for our future with Microsoft. We’re pleased the CMA has responded positively to the solutions Microsoft has proposed, and we look forward to working with Microsoft toward completing the regulatory review process.”
Microsoft vice chair and president Brad Smith said on X: “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 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
Sarah Cardell, CEO of the CMA, said in a statement, “The CMA’s position has been consistent throughout – this merger could only go ahead if competition, innovation, and choice in cloud gaming was preserved. In response to our original prohibition, Microsoft has now substantially restructured the deal, taking the necessary steps to address our original concerns.”
“It would have been far better, though, if Microsoft had put forward this restructure during our original investigation. This case illustrates the costs, uncertainty and delay that parties can incur if a credible and effective remedy option exists but is not put on the table at the right time.”
Activision Blizzard CEO Bobby Kotick said in a statement sent to employees: “This is a significant milestone for the merger and a testament to our solutions-oriented work with regulators. I remain optimistic as we continue the journey toward completion and am very grateful to each of you for your dedication and focus throughout this process.”