Microsoft-Activision: UK Poised To Approve Restructured Deal


The UK’s Competition and Markets Authority (CMA) has indicated that it is ready to give the green light to Microsoft’s proposed acquisition of Activision. In an update today, the CMA stated that the restructured deal has sufficiently addressed the concerns raised with the original transaction earlier this year.

The CMA had originally blocked the $68.7 billion gaming mega-merger in April, citing worries about diminished competition in the cloud gaming market. However, they opened a new investigation last month into a revised proposal from Microsoft, which included the sale of Activision’s cloud gaming rights to Ubisoft.

Key Takeaway:

The UK’s competition watchdog is expected to approve Microsoft’s restructured proposal to acquire Activision. This revised deal, which includes the sale of cloud gaming rights to Ubisoft, addresses the concerns raised by the CMA earlier this year. While there are still some residual concerns, Microsoft’s offered remedies are likely to resolve them. The CMA has opened a consultation period until October 6th to consider these proposed remedies.

The CMA now suggests that this sale will resolve their previous concerns and pave the way for the deal to be approved. They highlight the importance of preventing Microsoft from gaining control over Activision’s content in relation to cloud gaming. By transferring the cloud streaming rights to Ubisoft, competition in the market is maintained.

Despite these positive developments, the CMA does have some residual concerns regarding certain provisions in the sale agreement. However, Microsoft has offered remedies to address these concerns, and the CMA anticipates that they will resolve the remaining issues.

The acquisition deadline has been extended until mid-next month, and the CMA aims to complete its investigation of the restructured proposal by October 18th. While the journey to approval has been unusual, the CMA’s blockage was the final hurdle for Microsoft and Activision after receiving clearance from European Union authorities and US courts.

Sarah Cardell, the CEO of the CMA, defended the watchdog’s approach, emphasizing that preserving competition, innovation, and choice in cloud gaming has been their consistent position. She expressed a hope that Microsoft had presented this restructured deal earlier in the initial investigation.

In addition, the concessions made by Microsoft to clear the deal with the CMA have reportedly captured the attention of EU competition regulators. It has been reported that the EU is seeking input from Microsoft’s competitors and customers regarding the proposed deal.

The restructured deal sees Microsoft agreeing not to acquire the cloud streaming rights to all future Activision games released globally, except in the European Economic Area. These rights would be divested to Ubisoft before the acquisition takes place.

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