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U.K. Regulators Give Preliminary Approval to Microsoft’s $68.7 Billion Activision Acquisition

U.K. Regulators Give Preliminary Approval to Microsoft’s $68.7 Billion Activision Acquisition

The U.K.’s Competition and Markets Authority Sept. 22 agreed to give preliminary approval to Microsoft’s $68.7 billion acquisition of video game publishing giant Activision Blizzard. The greenlight marks the last hurdle for Microsoft, which first announced the acquisition in January 2022.

The regulatory agency said Microsoft had addressed it concerns in a restructured merger proposal, which included Microsoft agreeing not to purchase the cloud gaming rights held by Activision, which will instead be sold to an independent third party, Ubisoft Entertainment SA, before the deal is completed.

Ubisoft will be free to offer Activision’s games, which include the “Call of Duty” and “World of Warcraft” franchises, both directly to consumers and to all cloud gaming service providers however it chooses, including for buy-to-play or multigame subscription services, or any new distribution model for providing content that might emerge as the market develops. The deal with Ubisoft also requires Microsoft to port Activision games to operating systems other than Windows and support game emulators when requested, addressing the other main shortcoming with the previous remedies package.

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Earlier this year, the CMA blocked Microsoft from acquiring the whole of Activision due to concerns that the deal would harm competition in cloud gaming in the United Kingdom. After that deal was blocked, Microsoft submitted a restructured transaction in August for the CMA to review.

“The CMA’s position has been consistent throughout — this merger could only go ahead if competition, innovation, and choice in cloud gaming was preserved,” Sarah Cardell, CEO of the CMA, said in a statement.

Cardell said the deal would have been approved far earlier had Microsoft put forward the restructured deal during the agency’s original investigation. She said the 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.

“Microsoft has now substantially restructured the deal, taking the necessary steps to address our original concerns,” Cardell said in a statement.

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