UK Advises Microsoft: Avoid Exploring 'New Solutions' for Activision Acquisition

UK regulator rejects Microsoft's proposed remedies for Activision-Blizzard acquisition, demands restructuring.

In a recent development, it has been reported that Microsoft's proposed acquisition of Activision-Blizzard has hit a roadblock in the UK. While Microsoft has emerged victorious in its legal battle with the FTC, the UK's Competition and Markets Authority (CMA) is standing firm on its decision to not clear the deal.

According to Reuters, the CMA is not willing to accept any "new remedies" from Microsoft in an attempt to push through the acquisition. Instead, Microsoft would have to completely restructure the deal. However, even if the deal is restructured, the CMA would need to conduct a fresh investigation, which could potentially take several months before a final decision is reached.

The CMA clarified its stance by stating that while merging parties do not have the opportunity to propose new remedies once a final report has been issued, they can choose to restructure the deal, which would prompt a new merger investigation. Microsoft and Activision have expressed their willingness to consider modifying the transaction, and the CMA has indicated its willingness to engage in discussions with them. However, it is important to note that these discussions are still in the early stages, and the next steps will be determined in due course.

This statement from the regulator comes after Microsoft President Brad Smith expressed the company's readiness to negotiate with the UK regulator regarding the deal. In a tweet, Smith mentioned that while Microsoft disagrees with the CMA's concerns, they are exploring ways to modify the transaction in order to address those concerns in a manner acceptable to the CMA.

The CMA had initially blocked the deal in April, citing concerns that Microsoft could potentially exploit Activision's popular franchises to gain a monopoly in the emerging cloud gaming market. In response, Microsoft offered a "small and discrete divestiture" as a concession to convince the CMA to approve the acquisition, as reported by CNBC.

It is worth noting that Microsoft's battle with regulatory authorities is not limited to the UK. Although a US court rejected the FTC's request for a preliminary injunction against the deal, the agency still has the option to file an appeal. The FTC has stated that it will be announcing its next steps in the coming days as it continues to fight to preserve competition and protect consumers.

In conclusion, Microsoft's proposed acquisition of Activision-Blizzard is facing hurdles in the UK, as the CMA is not willing to accept new remedies and requires a complete restructuring of the deal. The discussions between Microsoft, Activision, and the CMA are still in the early stages, and it remains to be seen how the transaction will be modified to address the CMA's concerns. Additionally, the FTC's involvement in the matter adds another layer of complexity, as they have the option to appeal the court's decision. The future of this acquisition hangs in the balance, and further developments are eagerly awaited.

Share With Others