Despite block by UK authorities, EU regulators approve Microsoft Activision deal

  • MSFT.us
    (${instrument.percentChange}%)

On Monday, European regulators granted approval to Microsoft's proposed acquisition of Activision Blizzard, a deal worth $69 billion. While this decision does not guarantee the acquisition's completion, it may assist Microsoft in addressing objections raised by the United States and the United Kingdom.

The European Commission's approval comes shortly after British regulators rejected the purchase. According to the European Commission, Microsoft has committed to a 10-year licensing agreement that enables European consumers to access all existing and future Activision games through any cloud-gaming service of their choice.

Margrethe Vestager, the EU Commission's head of competition policy, emphasised the importance of safeguarding competition and innovation in the rapidly growing and dynamic gaming industry. She stated that the decision represents a significant step in this direction, as it allows Activision's popular games to reach a broader audience across various devices through cloud game streaming.

Despite the setback in the UK, Microsoft intends to appeal the decision and can potentially benefit from the European regulators' green light. Activision Blizzard CEO Bobby Kotick acknowledged the thorough and comprehensive process conducted by the European Commission, resulting in the merger's approval. However, stringent measures were imposed to ensure robust competition within the rapidly expanding industry.

Microsoft's vice chair and president, Brad Smith, highlighted that the European Commission's requirements oblige Microsoft to automatically license popular Activision Blizzard games to competing cloud gaming services worldwide. This move aims to empower millions of consumers globally, allowing them to play these games on their preferred devices.

Why Trade Shares with FXCM?

  • $0.00 Commission*
  • Mini Shares - Fractional Share Trading with minimum trade sizes of 1/10 of a share.
  • Low Margin Requirements

EU regulators were persuaded by Microsoft's commitments to license Activision content to competitors in the cloud-gaming sector. In contrast, British regulators argued that Microsoft's proposals were too limited and insufficient in preserving competition.

The UK Competition and Markets Authority (CMA) expressed its divergence from the European Commission's decision, emphasising their concerns about the future of the cloud gaming market and the effectiveness of behavioural commitments proposed by the involved parties. The CMA stands by its decision to block the deal.

In response to the EU announcement, the Federal Trade Commission in the United States also seeks to impede the acquisition, citing similar competition concerns as those raised by the UK authorities.

The proposed acquisition price stands at $95 per share.

References:
www.barrons.com

Russell Shor

Senior Market Specialist

Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.

${getInstrumentData.name} / ${getInstrumentData.ticker} /

Exchange: ${getInstrumentData.exchange}

${getInstrumentData.bid} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)

${getInstrumentData.oneYearLow} 52/wk Range ${getInstrumentData.oneYearHigh}
Disclosure
*

When executing customers' trades, FXCM can be compensated in several ways, which include, but are not limited to: spreads, charging commissions at the open and close of a trade, and adding a mark-up to rollover, etc. Commission-based pricing is applicable to Active Trader account types.

Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.

Past Performance: Past Performance is not an indicator of future results.

Spreads Widget: When static spreads are displayed, the figures reflect a time-stamped snapshot as of when the market closes. Spreads are variable and are subject to delay. Single Share prices are subject to a 15 minute delay. The spread figures are for informational purposes only. FXCM is not liable for errors, omissions or delays, or for actions relying on this information.