Microsoft gives ground on streaming in bid to remove UK block
To remove the last remaining regulatory obstacle to its huge acquisition of Activision Blizzard, Microsoft has made major concessions to the UK authorities.
According to the companies, Activision (ATVI)’s (ATVI) cloud streaming rights outside the European Union and three other European countries will be sold to Ubisoft Entertainment by the UK antitrust watchdog — the only regulator standing in the way of the $69 billion deal. In a blog post Tuesday, Microsoft president Brad Smith said the new proposal “presents a substantially different transaction” than its previous merger agreement.
“We believe this development will benefit players, the cloud game streaming market, and the growth of our industry,” Smith said.
After deciding to block the acquisition on its original terms, the UK Competition and Markets Authority restructured the deal on Tuesday. EU regulators approved the plan in May, so that move put the company at odds with them. In July, the US federal court also said it would not block the closing of the deal.
Sarah Cardell, chief executive of the CMA, said the regulator would now take the new proposal into consideration.
The goal remains the same – any decision on this new deal will ensure that the growing cloud gaming market continues to benefit from open and effective competition that drives innovation and choice.”
Ubisoft, a French video game developer, will now be able to license Activision’s content to cloud gaming providers outside the European Economic Area, including in the UK. Tuesday, Ubisoft shares rose 7% in Paris.
“This allows gamers to access Activision’s games in a variety of ways, including through cloud-based subscription services,” Cardell said.
In an effort to allow more time to reach an agreement with the CMA, Microsoft and Activision extended their merger deadline by three months to October 18. Microsoft said it expects the agency’s review process to be completed ahead of October 18, the statutory deadline for a CMA decision on the new merger proposal.
The planned acquisition of Activision by Microsoft was announced early last year. At the time, the transaction was valued at $69 billion, making it one of the largest deals in the tech industry.