UK competition watchdog digs into Microsoft’s £58bn mega deal with Activision Blizzard
Microsoft is under the spotlight of UK’s competition watchdog after snapping up “Call of Duty” maker Activision Blizzard for $68.7bn (£57.8bn) earlier this year in the biggest deal in gaming history.
The Competition and Markets Authority (CMA) said it had until 1 September to make a call on whether the deal would reduce competition in the UK.
This first stage will either lead to the clearance of the deal or a further probe by the regulator.
Commenting on the investigation, Microsoft’s Corporate Vice President & General Counsel Lisa Tanzi said: “We will fully cooperate with the CMA’s merger review. We expect and think it’s appropriate for regulators to take a close look at this acquisition. We have been clear about how we plan to run our gaming business and why we believe the deal will benefit gamers, developers, and the industry.
We’re committed to answering questions from regulators and ultimately believe a thorough review will help the deal close with broad confidence, and that it will be positive for competition. We remain confident the deal will close in fiscal year 2023 as initially anticipated.”
On the other side of the Atlantic, The Federal Trade Commission (FTC) announced said it would also be examining the deal instead of the Department of Justice (DOJ).
The FTC is regarded as a tougher regulator than the DOJ, and has reportedly become even more rigorous since Lina Khan became the new Chair.
If the deal does goes ahead, the combination will make Microsoft the third-largest gaming company by revenue, just behind Tencent and Sony.
The Activision deal includes iconic franchises, including Warcraft and Candy Crush, as well as its global eSports activities through Major League Gaming.
According to Refinitiv data, the Microsoft-Activision deal is also the largest all-cash acquisition on record.
The move towers above its acquisition of LinkedIn back in 2016 for $26bn (£19bn), as well as tech mega deals, like Salesforce snapping up Slack in 2020 for $27.7bn (£20.4bn) and the previous record deal of Dell buying EMC in 2015 for $67bn (£49bn).
With Activision Blizzard’s near 400 million monthly active players across 190 countries, Microsoft chairman Satya Nadella said gaming would play “a key role in the development of metaverse platforms” for the firm.