The UK Competition and Markets Authority (CMA) is expected to approve Microsoft’s $68.7 billion acquisition of Blizzard, a video game company, on Wednesday, April 26th, after an anti-trust probe.
The approval of the deal is coming after the CMA thoroughly investigated Microsoft’s proposed acquisition, which it felt if not properly scrutinized, could negatively impact the games industry.
As multinational corporations, Microsoft and Activision Blizzard needed regulatory approval from all markets in which they operate, and the UK’s regulator (CMA) was seen as a major obstacle.
In February this year, the Competition and Markets Authority (CMA) provisionally concluded that the merger could harm U.K. gamers through higher prices, fewer choices, or less innovation. The provisional findings from the CMA follow a wide-ranging investigation conducted over the last five months to understand the market and potential impact of the deal.
This included holding site visits and hearings to hear directly from business leaders at Microsoft and Activision, analyzing over 3 million internal documents from the two businesses to understand their views on the market, commissioning an independent survey of UK gamers, and gathering evidence from a range of other gaming console providers, game publishers, and cloud gaming service.
Following the CMA’s investigation of the deal, Investors King understands that Microsoft was working hard by making promises and assuring regulators of its plans to not go contrary to the gaming market laws.
Microsoft’s promises appeared to have worked as the CMA changed its tune towards the deal and issued updated provisional findings in its assessment of Microsoft’s proposed acquisition of Activision, stating that the transaction will not result in a substantial lessening of competition about console gaming in the UK.
In a recent development, the CMA disclosed via press release titled “CMA narrows the scope of concerns in Microsoft-Activision Review” in which it wrote, “The CMA has received a significant amount of new evidence in response to its original provisional findings. Having considered this new evidence carefully, together with the wide range of information gathered before those provisional findings were issued, the CMA inquiry group has updated its provisional findings and reached the provisional conclusion that, overall, the transaction will not result in a substantial lessening of competition about console gaming in the UK.
“Our provisional view that this deal raises concerns in the cloud gaming market is not affected by today’s announcement. Our investigation remains on course for completion by the end of April.”
While this has boosted Microsoft’s chances of getting the deal approved, reports reveal that the tech giant is still awaiting approval from the Federal Trade Commission (FTC), as it has a trial with the FTC scheduled for August 2nd after they sued to block the deal in December.