Home Microsoft Microsoft’s $68.7 Billion Activision Blizzard Acquisition Nears Completion Amid Regulatory Twists

Microsoft’s $68.7 Billion Activision Blizzard Acquisition Nears Completion Amid Regulatory Twists

Microsoft is on the brink of finalizing its mammoth $68.7 billion acquisition of gaming titan Activision Blizzard. While the deal appears set to close on Friday, October 13th, it remains subject to the UK’s Competition and Markets Authority (CMA) final approval. This marks the near end of a tumultuous 20-month journey fraught with regulatory hurdles, both in the United States and Europe.

A Tumultuous Path to Approval

Earlier this year, Microsoft faced significant obstacles to its acquisition plans. The CMA initially blocked the deal in the UK over cloud gaming concerns. Around the same time, the European Union gave the green light but demanded cloud-related concessions. On the other side of the Atlantic, the Federal Trade Commission (FTC) initially sued to halt the merger but failed to secure a preliminary injunction. Despite these roadblocks, Microsoft has navigated through, even restructuring the deal to appease regulators.

The Turning Tide

The restructured deal, which involved transferring some cloud gaming rights for current and new Activision Blizzard games to Ubisoft, swayed the CMA’s stance. Preliminary approval from the CMA was granted last month. This green light was hailed as a significant milestone by Microsoft executive Brad Smith and Activision CEO Bobby Kotick, both of whom expressed optimism about final approval by October 18th.

Market Reaction to Preliminary Approval

The initial nod from the CMA led to modest market shifts. While Microsoft shares remained relatively stable, Activision’s stock rose by 1.3%. Ubisoft, which stands to gain some cloud gaming rights under the restructured deal, saw its shares climb as much as 3.26% in Paris.

FTC’s Relentless Challenge

Despite this progress, the FTC has not backed down. It is still appealing the outcome of the earlier hearing and has even resumed its own administrative case against the acquisition. While Microsoft and Activision are confident, the FTC’s move indicates that the regulatory landscape remains fraught. However, analysts like Daniel Ives from Wedbush Securities view these efforts as a ‘Hail Mary’ attempt, unlikely to derail the acquisition.

Strategic Implications for Microsoft

The Activision Blizzard acquisition holds strategic importance for Microsoft, particularly for its Xbox division. This deal is part of a larger strategy that initially had a focus on the metaverse but has since evolved. The acquisition will bolster Microsoft’s gaming portfolio, adding popular titles like “Call of Duty” and “World of Warcraft,” and is expected to have significant implications for the cloud gaming sector.

Microsoft Xbox Activision Blizzard

Final Words: The Road Ahead

As the CMA’s final decision looms, the gaming and tech communities are on the edge of their seats. This acquisition could mark a transformative moment in the gaming landscape. Despite regulatory challenges, the deal seems more likely to go through than not, potentially reshaping competition and setting a new bar for future tech acquisitions. But as with all such significant deals, the impact on prices, choice, and innovation in the gaming sector will be closely watched in the chapters that follow this landmark decision.

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