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Microsoft’s Activision Blizzard takeover: EU regulator decision on MSFT’s ATVI acquisition timing and details

By Jenal Mehta

10:20, 10 October 2022

line for call of duty gaming release
Microsoft take over of Activision waiting approval of EU regulators. Photo - Getty Images

The largest deal in the gaming industry is on the next step of being completed. EU regulators are preparing to reveal their verdict regarding the proposed take-over of Activision Blizzard (ATVI) by Microsoft (MSFT).

The European regulators have already received all survey respondents by October 10 and are due to make a preliminary decision by November 10.

Depending on further approvals, the $68.7bn all-cash deal is expected to complete by mid 2023.

Microsoft (MSFT) Price Chart

Following this, Microsoft would own Activision, Blizzard Entertainment and King. Microsoft would thus control some key franchises such as Candy Crush, Warcraft, Call of Duty, Crash Bandicoot and Spyro.

This places Microsoft in better competing position against peers such as Tencent (0700), Nvidia (NVDA) and Sony (SNE).

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EU investigates

Surveyors were asked some 100 odd questions by regulators. Some of the questions asked, as reported by Reuters, were surrounding how this deal will affect competition.

There were questions around whether Microsoft’s own large collection of data, which is unmatched by other gaming peers, would give the tech giant a competitive advantage in the development, publishing and distribution of future computer and console games.

A question arose regarding if following this deal there will be sufficient number of alternative suppliers in the market, especially if Microsoft (MSFT) decides to make some of the key games only available on the Xbox.

 

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But the survey also asked if without such exclusive deals, would Microsoft be able to effectively compete with rivals.

Regulators have also asked game developers about how important Call of Duty is to the industry and whether there are any incentives for Microsoft to block rivals’ access to the best-selling game Call of Duty.

EU regulators were also interested in knowing where this deal will change perceptions of cloud gaming.

Activision Blizzard (ATVI) Price Chart

Pending approvals

The deal which was originally made public in January 2022 has piqued market interest since its announcement.

The take-over cash which will be received by Activision (ATVI) is not only the highest in history but also will allow them to retain their key decision makers. The benefits of the take-over to the gaming company were immense and thus swiftly approved by board members.

The deal has to be approved by a number of international regulators. One of the first approvers was the Brazilian Admirative council back in April 2022. They approved without any restrictions.

CEO of Activision Bobby Kotick commented at the time "Today's overwhelmingly supportive vote by our stockholders confirms our shared belief that, combined with Microsoft, we will be even better positioned to create great value for our players, even greater opportunities for our employees, and to continue our focus on becoming an inspiring example”

Approvals from the US Federal Trade Commission and from the UK Competition and Markets Authority are still due to be made. Both are likely waiting on what the EU regulators come back with at the start of November.

Markets in this article

MSFT
Microsoft Corp (Extended Hours)
414.03 USD
-1.51 -0.360%
NVDA
NVIDIA Corp (Extended Hours)
858.05 USD
34.23 +4.160%
SNE
Sony
86.71 USD
-1.72 -1.960%
0700
Tencent
270.5 USD
-6 -2.180%

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