In the wake of Microsoft’s stunning legal victory against the FTC’s attempt to block its Activision Blizzard acquisition, the UK Competition and Markets Authority (CMA) has agreed to renegotiate its decision against the deal. This is an incredible development that casts the probable outcome of this acquisition in an entirely new light.
In other words, this deal is going through.
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“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,” a UK Competition and Markets Authority statement reads. “In order to be able to prioritize work on these proposals, Microsoft and Activision have agreed with the CMA that a stay of litigation in the UK would be in the public interest and all parties have made a joint submission to the Competition Appeal Tribunal to this effect.”
“After today’s court decision in the US our focus now turns back to the UK,” Microsoft president Brad Smith added. “While we ultimately disagree with the CMA’s concerns, we are considering how the transaction might be modified in order to address those concerns in a way that is acceptable to the CMA.”
As I’m sure you know, the UK CMA inexplicably chose to block the Activision Blizzard merger in April, citing concerns that Microsoft might somehow dominate the non-existent market for cloud gaming. Microsoft appealed that decision in May, and the two sides were scheduled to face off in a trial starting July 28. The issue there was that this date is after the July 18 deal termination deadline that Microsoft and Activision Blizzard agreed to. And so Microsoft was reportedly planning to consummate the acquisition regardless of the UK’s opposition should the FTC, the only other major regulatory body to block the acquisition, lose in court. Which it just did.
And so, miraculously, the CMA wants to discuss things again despite having issued a final ruling. And that means that, should the two sides come to terms quickly, Microsoft can proceed with its acquisition with no legal weirdness. And if they cannot agree, you know what? I think Microsoft should go through with it anyway. The CMA’s decision was nonsensical and unfair to begin with.
What a day.