UK CMA Says it Could Investigate Restructured Microsoft Activision Deal

After a US court ruled that Microsoft could complete its acquisition of Activision Blizzard yesterday, all eyes are now on the UK’s Competition and Markets Authority (CMA), which was the first antitrust regulator to block the deal in April. Yesterday, the CMA had a sudden change of heart and said in a statement that it was ready to renegotiate with Microsoft.

“We stand ready to consider any proposals from Microsoft to restructure the transaction in a way that would address the concerns set out in our final report,” the CMA said in its first statement yesterday. Today, the regulator has followed up with a second statement with a warning (via Reuters): The CMA won’t accept new remedies from Microsoft, and it’s also ready to open a new investigation if Microsoft chooses to restructure its Activision Blizzard deal.

“Whilst merging parties don’t have the opportunity to put forward new remedies once a final report has been issued, they can choose to restructure a deal, which can lead to a new merger investigation. Microsoft and Activision have indicated that they are considering how the transaction might be modified, and the CMA is prepared to engage with them on this basis,” the CMA said in this new statement.

The regulator also said that discussions with Microsoft are still “at an early stage” and that the next steps have yet to be determined. “While both parties have requested a pause in Microsoft’s appeal to allow these discussions to take place, the CMA decision set out in its final report still stands,” the CMA said.

While Microsoft continues to negotiate with the CMA, the regulator opening a new investigation of a restructured deal would be another unexpected turn of events for an already drawn-out acquisition process. Before the CMA agreed to re-open discussions with Microsoft, the software giant was getting ready to appeal the CMA’s decision to block the deal at the Competition Appeal Tribunal, with the trial starting on July 28.