Microsoft's Acquisition of Activision Blizzard Has Been Approved by British CMA

Early today the British Competition and Markets Authority (CMA) granted its consent to the $68.7 billion acquisition of Activision Blizzard by Microsoft, paving the way to its closure.

In the 13-page decision, the regulator argues that the restructured deal proposed by Microsoft, which divests streaming rights from Activision's PC and Console games outside of the European Union to Ubisoft, addresses the competition concerns that caused the deal to be initially blocked. 

As a matter of fact, the CMA triumphantly defines that clause "a game-changer that will promote competition" in its press release, as it places the streaming rights "in the hands of a strong and independent competitor with ambitious plans to offer new ways of accessing that content."

The regulator also provided a few statements from chief executive Sarah Cardell, who certainly appears to spin this decision as a victory for the CMA instead of accession to Microsoft's demands. 

The CMA is resolute in its determination to prevent mergers that harm competition and deliver bad outcomes for consumers and businesses. We take our decisions free from political influence and we won’t be swayed by corporate lobbying. 

We delivered a clear message to Microsoft that the deal would be blocked unless they comprehensively addressed our concerns and stuck to our guns on that.

With the sale of Activision’s cloud streaming rights to Ubisoft, we’ve made sure Microsoft can’t have a stranglehold over this important and rapidly developing market. As cloud gaming grows, this intervention will ensure people get more competitive prices, better services and more choice. We are the only competition agency globally to have delivered this outcome. 

But businesses and their advisors should be in no doubt that the tactics employed by Microsoft are no way to engage with the CMA. Microsoft had the chance to restructure during our initial investigation but instead continued to insist on a package of measures that we told them simply wouldn’t work. Dragging out proceedings in this way only wastes time and money.

On the other hand, Microsoft reacted in a rather mild-mannered way, with vice-president Brad Smith posting the following on X (Formerly Twitter).

We’re grateful for the CMA’s thorough review and decision today. We have now crossed the final regulatory hurdle to close this acquisition, which we believe will benefit players and the gaming industry worldwide.

Activision Blizzard CEO Bobby Kotick sent a mail to the company shared by chief commercial officer Lulu Cheng Meservey.

Team,

Today the CMA, the regulatory authority in the UK, approved our transaction with Microsoft. 

We now have all regulatory approvals necessary to close and we look forward to bringing joy and connection to even more players around the world. 

Our board chair Brian Kelly and I are incredibly proud of all of you and your accomplishments over the last four decades. We're excited for our next chapter together with Microsoft and the endless possibilities it creates for you and for our players. 

With gratitude, 

Bobby 

What Does this All Mean for Microsoft's Acquisition of Activision Blizzard?

As mentioned in the statements above, this removes the last regulatory hurdle to the closure of the deal, leaving the American FTC alone in its continued opposition. The US regulator lacks the power to stop the deal before it is consumed as its attempts to obtain preliminary injunctions have been rejected by both a Federal Court and the Court of Appeals. 

While the FTC is still planning to address the acquisition in its administrative law court, a ruling against it would leave the regulator with the option to seek a divestiture, which would be long and very arduous in legal terms. 

Earlier today, the New York Stock Exchange halted trading of Activision Blizzard stock, as traders expect the acquisition to probably officially close today before the market opens.