The Microsoft – Activision Blizzard Deal Gets UK Preliminary Nod

In a sharp turn, the UK’s Competition and Markets Authority (CMA) has issued preliminary approval for Microsoft’s monumental $69 billion acquisition of Activision Blizzard and it now looks like the deal will go forward as they were the final approval authority. The journey to this point was marked by a temporary halt when the CMA initially blocked the acquisition, citing concerns related to cloud gaming. Renewing hope has been made possible by Microsoft’s recent reorganization of the agreement, which involved the transfer of cloud gaming rights for both current and upcoming Activision Blizzard games to Ubisoft.

In a note to staff members, Xbox CEO Phil Spencer praised this choice as “a positive development and a welcome indicator that our hard work is bringing us closer to our goal.” The restructured agreement has undergone important and crucial revisions to address the difficulties raised during the early phases of the transaction, the CMA said in a news release, potentially clearing the way for clearance.

See Phil Spencer’s memo below; 

I have an encouraging update to share about our proposed acquisition of Activision Blizzard.

Today, the UK CMA provisionally concluded that the solutions we have offered to address its concerns about the impact of the acquisition on future competition in cloud game streaming are acceptable. This is a positive development and a welcome indicator that our hard work is bringing us closer to our goal.

Prior to making its final decision on whether to clear the transaction, the CMA is soliciting feedback from the industry and public. During this time, we will continue to work toward addressing any remaining concerns and earning approval to close.

We continue to work toward concluding this process by the October 18 deadline and will share more information as we get it. Thanks to everyone whose ongoing efforts have brought us to this point—your hard work and dedication is very much appreciated.

Phil

This approval, however, is preliminary and precedes the final green light. The CMA has initiated a consultation phase, seeking feedback from third parties regarding Microsoft’s proposed remedies, which will run until October 6th. The anticipated final decision is slated for prior to the extended deadline of October 18th.

Read more: EU Approves Microsoft’s Acquisition Of Activision Blizzard

The consultation period aims to tackle the remaining reservations that the CMA holds regarding the deal. The CMA acknowledges “limited residual concerns with the new deal,” but deems Microsoft’s proposed solutions as promising remedies.

Microsoft is understandably buoyant about this development, with Microsoft’s vice chair and president, Brad Smith, stating, “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

Activision Blizzard also expressed satisfaction with the CMA’s response. CEO Bobby Kotick lauded it as “a significant milestone for the merger and a testament to our solutions-oriented work with regulators.” He further conveyed optimism regarding the path ahead, emphasizing the dedication and focus exhibited throughout the process by everyone involved.

With the UK serving as the final regulatory checkpoint, Microsoft’s colossal deal inches closer to realization, signalling a potential transformation in the gaming industry landscape.