UK regulators leave door open for quick Microsoft-Activision deal

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UK regulators have opened the door for Microsoft and Activision Blizzard to close their $75 billion video game deal within at least six weeks, as the companies attempt to restructure their agreement to meet competition concerns. are fighting for.

The UK’s Competition and Markets Authority said on Friday it would extend a July 18 deadline to block the deal to August 29, after receiving a “detailed and complex submission from Microsoft”. The company argued that the agency should re-examine its findings due to “significant changes in circumstances and special reasons”.

That timetable could allow Microsoft to complete the merger more quickly than the CMA suggested earlier this week, when the agency said a restructured deal would trigger a new investigation that could take several months. likely to occur.

The CMA’s move to reopen discussions about its final decision, which is unusual so late in the regulatory process, could undermine Microsoft’s ability to address the watchdog’s concerns about competition in the cloud gaming market. revives. The CMA did not provide details of Microsoft’s submission, which was made more than a month ago.

The expansion comes as Microsoft is exploring ways to restructure its cloud gaming business in the UK to appease the CMA, which ruled in April that the maker of the Xbox console would be merged with the maker of hit games. Duty And diablo Will give it “the ability to undermine new and innovative competitors”.

Objections from Britain’s competition regulator are seen as the last major legal hurdle facing the world’s biggest video game deal, as US courts earlier this week rejected an initial attempt by the Federal Trade Commission to block the merger. Took Microsoft’s side to do it.

The merger agreement between Microsoft and Activision Blizzard is set to expire on July 18, which would allow either company to walk away from the deal and apply a break fee of $3 billion. However, following a legal victory in US courts this week and a potential lifeline in Britain, people close to the companies say they are likely to agree an extension to the deal as early as next week.

“Things are moving very quickly,” said a person close to the talks.

One possible concession to the CMA under consideration by Microsoft is a move to sell cloud streaming rights to its catalog of games in the UK to another provider, according to people familiar with the discussions. Under this arrangement Microsoft could effectively exit the cloud gaming market in the UK or hand over the operation of the game streaming platform for its Xbox consoles to a third party.

Microsoft has pitched to potential investors and operators about such a deal, which could calm CMA’s concerns that the Xbox maker would have too much control of the emerging market for cloud gaming.

Bloomberg previously reported details of the cloud discussions. Microsoft and Activision Blizzard declined to comment.

Anders Analysis analyst Gareth Sutcliffe said such a deal would be “really awkward” for consumers but “could be a way to avoid the CMA”. “Microsoft will release numbers for the UK that will please the CMA,” he added. “They must be looking for the least worst option.”

Additional reporting by Kate Beaulieu in London and Richard Waters in San Francisco