The UK CMA says Microsoft's revised offer to acquire Activision, which includes selling some gaming rights to Ubisoft, appears to address its concerns

- CMA says revised offer opens the door to deal approval — Microsoft Corp.'s $69 billion acquisition of Activision Blizzard Inc. looks set …

Bloomberg 2023-09-22 Katharine Gemmell

Context & Ripple Effects

The CMA’s position marks a reversal from its earlier finding that the proposed acquisition could harm competition in UK gaming, followed by its decision to block the transaction over competition and innovation concerns.

The remedy shifts the issue from whether the deal can proceed to whether a transfer of gaming rights to Ubisoft can preserve an independent route to market. It builds on the regulator’s earlier view that some console-supply concerns had been provisionally alleviated by new evidence.

First-order effects

Microsoft and Activision gain a credible path toward UK clearance, contingent on the CMA’s final assessment of the restructured transaction.
Ubisoft becomes the recipient of the specified gaming rights, making it a central party in the remedy designed to address the CMA’s concerns.

Second-order effects

The proposed rights transfer gives the CMA a concrete test for whether a divestiture can maintain competitive options without requiring the underlying acquisition to be abandoned.
Other large game-industry transactions face a clearer incentive to offer enforceable asset or rights carve-outs when regulators identify risks in emerging distribution channels.

Third-order effects

If such remedies are accepted, merger review may increasingly determine who controls access rights and distribution pathways, not just which companies own game studios.
The case points to governance as market access: regulatory approval can reshape a deal’s commercial architecture by assigning strategic rights to a third party.

The trend: Competition authorities are pushing platform acquisitions toward remedies that distribute control over key access and distribution rights rather than relying on buyer commitments alone.

Discussion

Pure Xbox Ben Kerry on x
CMA Approval A ‘Significant Milestone’ Towards Xbox Merging With Activision Blizzard
Gameranx Ryan Parreno on x
Microsoft And Activision Heads Respond To CMA's Provisional Deal Approval
@bradsmi Brad Smith on x
We are encouraged by this positive development in the CMA's review process. 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...
@ethangach @ethangach on x
CMA reverses course and provisionally approves Microsoft's new deal to buy Activision Blizzard which involves Ubisoft getting cloud rights in the UK. Final decision is still coming but hard to see anything stopping the acquisition now. https://www.gov.uk/... [image]
@stephentotilo Stephen Totilo on x
Microsoft's purchase of Activision is nearly a sure thing as of this morning. UK's previously resistant competition regulator has given provisional approval to the revised deal that gives Ubisoft control of cloud gaming rights for Activision Blizzard games https://www.axios.com/.…
@tomwarren Tom Warren on x
the timing. Here's Activision Blizzard CEO Bobby Kotick meeting with the UK Chancellor just as the CMA provisionally approves Microsoft's Activision deal. Kotick previously said the UK would be a “Death Valley” of investment and opportunities if the deal didn't go ahead
@tomwarren Tom Warren on x
turns out this week remains crazy 🥲 CMA posted its preliminary decision a little earlier than I was expecting. Now anticipating a final decision on Microsoft's Activision Blizzard deal in early October [image]
@ethangach @ethangach on x
CEO of the CMA blames the regulatory holdup on Microsoft: “It would have been far better, though, if Microsoft had put forward this restructure during our original investigation. This case illustrates the costs, uncertainty and delay that parties can incur”
@georgeosborn George Osborn on x
7am: CMA provisionally approves Microsoft's restructured deal to acquire Activision Blizzard. 11am: HM Treasury pops this photo up of Jeremy Hunt meeting US games industry leaders. [image]
r/XboxSeriesX r on reddit
CMA have released preliminary findings for ABK deal... it's good!
r/Games r on reddit
New Microsoft/Activision deal addresses previous CMA concerns in cloud gaming
r/GeForceNOW r on reddit
New Microsoft/Activision deal addresses previous CMA concerns in cloud gaming
r/PS5 r on reddit
New Microsoft/Activision deal addresses previous CMA concerns in cloud gaming

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