The UK regulator has not only banned the purchase of Activision: it also bans Microsoft from investing in the company

When Microsoft announced in January of last year that it would buy Activision Blizzard for $68.7 billion, it knew it wouldn’t be an easy deal. The video game industry was close to starring the largest acquisition operation of his story. And of course, a movement of this magnitude had to meet an essential requirement before it materialized: receive the approval of more than a dozen regulators.

The path towards the definitive concretion of the agreement became a true soap opera with a series of well-defined protagonists: Sony, the Federal Trade Commission (FTC) of the United States, the European Commission (EC) and the Markets Authority and the UK Competition (CMA). The former, as could be deduced, was clearly against the operation from the outset, and the latter decided that it was necessary to block it.

The CMA extends its tentacles

After a lengthy, multi-step process involving the stakeholders involved in the purchase, the CMA took a strong stance: the purchase of Activision Blizzard would give Microsoft a decisive competitive advantage in the field of cloud gaming, thus determined prohibition Of the same. That decision was not well received by the Redmond company, which immediately came out to defend itself.

At the time of the CMA announcement, Posted on April 26, the final resolutions of the FTC and the European Commission were still pending, so the British regulator went even further. While its scope is limited to the territory where it has jurisdiction, he stated: “Activision is intertwined across different markets, you can’t separate it for the UK. Therefore, this decision prevents the deal from happening globally.”

This week, however, rumors emerged strongly that the European Commission would end up approving the operation. According to various sources consulted by ReutersMicrosoft’s promise to bring ‘Call of Duty’, one of Activision’s star games, to platforms like Nintendo, NVIDIA GeForce Now, among others, was instrumental in consigning the multi-billion dollar deal to approval. Now, these days the CMA reappeared on the scene with a new measure.

The UK Competition Authority issued a temporary order in which it prohibits any of the firms involved in the operation in question from acquiring the participation of another and even making investments. From an economic point of view, not only people can buy shares. Companies can also do it, in fact, the role of “Holdings” is very common, which precisely have participation and exercise some control of companies through their possession of shares.

As a result of this latest measure, until the CMA’s further investigation is complete, if Microsoft, Activision Blizzard or any of their subsidiaries want to obtain participation from each other they must obtain a “written consent” issued by the British regulator. In other words, in addition to the standard requirements for these market moves, companies should abide by this new CMA requirement and wait for its approval.

The European Commission is expected to rule on May 22 and the Federal Trade Commission to do so later this year. It should be noted that the initial agreement between Microsoft and Activision Blizzard has a deadline. The operation must be finalized before July 18, 2023. Those from Redmond have not given up on the British regulator, and have decided to appeal the ruling.

Although there is the possibility of negotiating an extension of the deadline, Microsoft needs the soap opera to end as soon as possible. If your strategy fails, you will not only take a major hit to your future goals for the video game business, but you will have to pay around 3 billion dollars to Activision Blizzard for breach, notes The Verge. In the coming months we will know the outcome of this story.

Images: sigmund | Microsoft | Activision

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