CMA and Microsoft call a truce, reportedly reach a compromise
Things are moving pretty quickly now that a court has rejected the Federal Trade Commission’s (FTC) preliminary injunction against Microsoft’s acquisition of Activision Blizzard. Soon after the ruling became public, the UK’s Competition and Market Authority (CMA), which had not approved the takeover in its own investigation and was getting ready to fight Microsoft’s appeal of that decision, jointly with Microsoft announced a truce to negotiate a compromise.
Microsoft’s Brad Smith said in a statement confirmed by the CMA: “After today’s court decision in the U.S., our focus now turns back to the UK. While we ultimately disagree with the CMA’s concerns, we are considering how the transaction might be modified in order to address those concerns in a way that is acceptable to the CMA. In order to prioritize work on these proposals, Microsoft and Activision have agreed with the CMA that a stay of the litigation in the UK would be in the public interest and the parties have made a joint submission to the Competition Appeal Tribunal to this effect.”
With yesterday’s ruling in the US, the CMA found itself in an isolated and increasingly weak spot in regards to the acquisition, since every other big regulating body such as the European Union had approved the deal. From that perspective, it’s probably sensible for the CMA to negotiate and get some sort of compromise out of it.
As for what that compromise will entail, CNBC has obtained hints that Microsoft and the CMA may already have come to an agreement about Microsoft making a “small divestiture” to obtain approval of the deal. With the CMA’s focus being heavily on cloud gaming throughout the initial investigation, it’s possible that the regulator is looking for a compromise in this area, but this is not confirmed in any way.
Since a deal seems close or may already be in the bag, we may see Microsoft and Activision Blizzard proceed with the acquisition quickly.
