Microsoft’s Activision Blizzard deal gets preliminary approval from UK regulator

Illustration by William Joel / The VergeThe UK’s Competition and Markets Authority (CMA) has given preliminary approval for Microsoft to proceed with its $69 billion Activision Blizzard deal. The CMA had originally blocked the acquisition over cloud gaming concerns,...

Aliver Aliver
Sep 22, 2023 - 21:02
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Microsoft’s Activision Blizzard deal gets preliminary approval from UK regulator

The UK’s Competition and Markets Authority (CMA) has given preliminary approval for Microsoft to proceed with its $69 billion Activision Blizzard deal. The CMA had originally blocked the acquisition over cloud gaming concerns, but Microsoft recently restructured the deal to transfer cloud gaming rights for current and new Activision Blizzard games to Ubisoft. In a memo to employees (included below), Xbox boss Phil Spencer called it “a positive development and a welcome indicator that our hard work is bringing us closer to our goal.”

“The CMA considers that the restructured deal makes important changes that substantially address the concerns it set out in relation to the original transaction earlier this year,” the CMA said in a press release, and “opens the door to the deal being cleared.”

This is just a preliminary decision, ahead of final approval. The CMA says it has now opened a consultation to gain third-party feedback on Microsoft’s proposed remedies, until October 6th. A final decision is expected before the extended October 18th deadline.

A final decision is expected before the extended October 18th deadline

The consultation period is meant to address a few remaining concerns that the CMA has with the deal. “While the CMA has identified limited residual concerns with the new deal, Microsoft has put forward remedies which the CMA has provisionally concluded should address these issues.”

Microsoft is understandably optimistic about the decision. “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,” said Microsoft vice chair and president Brad Smith on X (formerly Twitter.)

Activision Blizzard is also pleased with the CMA’s response. “This is a significant milestone for the merger and a testament to our solutions-oriented work with regulators,” said Activision Blizzard CEO Bobby Kotick in a statement sent to employees. “I remain optimistic as we continue the journey toward completion and am very grateful to each of you for your dedication and focus throughout this process.”

The UK is the final regulatory hurdle for Microsoft’s giant deal.

Phil Spencer memo:

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

Update September 22nd, 10:53AM ET: Added memo from Phil Spencer regarding the CMA response.