UK reexamines Microsoft’s Activision Blizzard deal due to changes in the merger proposal.

The United Kingdom’s Competition and Markets Authority (CMA) has taken an unprecedented step by launching a new investigation into Microsoft Corp.’s planned $69 billion acquisition of Activision Blizzard Inc. This move comes as a response to a significant alteration made to the proposed terms of the deal by Microsoft, effectively hitting the reset button on the acquisition process. This development, as reported by Bloomberg, marks a rather unique occurrence in the realm of antitrust investigations.The CMA’s decision to initiate a fresh investigation is rooted in Microsoft’s indication that it intends to make a notable change to the merger proposal. Specifically, Microsoft plans to sell the rights to all current and future Activision games for the next 15 years to Ubisoft Entertainment SA, a significant player in the gaming industry. However, it’s crucial to highlight that this proposed divestment will exclude the European Economic Area, as clarified by the CMA.The decision to reassess the acquisition proposal at this juncture is not one that is commonly seen in antitrust investigations. It comes after a series of twists and turns in the regulatory landscape surrounding the Microsoft-Activision deal. Initially, the acquisition appeared to be proceeding at a steady pace. However, the momentum shifted when the UK agreed to reevaluate the matter in light of new evidence.Adding to the complex narrative, Microsoft managed to overcome a legal challenge posed by the Federal Trade Commission (FTC) in the United States. This legal victory in the US was a significant development that further bolstered the company’s position in pursuing the acquisition. Moreover, the European Union granted approval for the deal with certain stipulated behavioral measures in place.The head of the CMA, Sarah Cardell, emphasized that the decision to initiate a new investigation does not imply an automatic green light for the acquisition. She underscored the authority’s commitment to conducting a thorough and objective assessment of the restructured deal, taking into consideration its potential impact on competition. This assessment includes considering feedback and insights from various stakeholders, a standard practice in such cases.As a result of this renewed investigation, the CMA is embarking on what is referred to as a “phase one” evaluation of the deal. To ensure a comprehensive evaluation, the CMA has set a statutory deadline of October 18 for completing this assessment. This extended timeline reflects the authority’s dedication to a meticulous examination of the altered terms and their implications before reaching a definitive conclusion on the acquisition’s regulatory fate.

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