Microsoft Corp.’s $69 billion Activision Blizzard Inc. acquisition got a new chance at winning approval from UK regulators after the tech giant submitted a substantially different deal to the country’s antitrust watchdog.
In a rare move, the Competition and Markets Authority is reconsidering the offer from Microsoft after it said it would sell the rights of all current and future Activision games released during the next 15 years to Ubisoft Entertainment SA. The divestment doesn’t include the European Economic Area, the CMA said.
A reconsideration of a CMA merger decision at this stage is incredibly rare and follows a series of dramatic twists and turns in the deal’s global regulatory battles. The deal, until recently thought moribund, gained unexpected momentum after the UK agreed to review new evidence. In the US Microsoft beat the Federal Trade Commission’s court challenge over the deal. The European Union cleared the deal with behavioral remedies in May.
“This is not a green light,” Sarah Cardell, head of the CMA, said. “We will carefully and objectively assess the details of the restructured deal and its impact on competition, including in light of third-party comments.”
As it navigated regulatory obstacles, Microsoft missed the July 18 deadline in the original agreement — signed in January 2022 — to close the acquisition. Activision agreed to extend the timeline until Oct. 18 to give Microsoft more time to iron out the remaining hurdles.
Microsoft asked the UK regulator in July to reconsider its April veto on the grounds that the situation had “materially changed,” given the US court decision and a subsequent deal it reached to license Activision blockbuster title Call of Duty to rival Sony Group Corp. The divestiture proposal may obviate the need for the CMA to rule on that request.
“Under the restructured transaction, Microsoft will not be in a position either to release Activision Blizzard games exclusively on its own cloud streaming service — Xbox Cloud Gaming – or to exclusively control the licensing terms of Activision Blizzard games for rival services,” Microsoft said in the statement.
Ubisoft said in its own statement that the rights, which “will exist in perpetuity,” will be added to the Ubisoft+ subscription service.
The CMA has said it prefers structural remedies to address concerns about mergers that hinder competition. To satisfy that preference, Microsoft and Activision have been seeking a divestiture that wins over regulators without harming what Microsoft considers the key parts of the acquisition. The software giant has publicly ruled out selling the Call of Duty franchise, for example.
The phase one probe will now restart and the CMA set a statutory deadline of Oct. 18.
(Updates throughout)