Introduction:
In a strategic maneuver prompted by regulatory intervention, tech behemoth Microsoft has been compelled to revise its bid to acquire Call of Duty creator, Activision Blizzard, valued at $69 billion. The revision comes in the wake of the UK competition watchdog’s intervention, which blocked the initial acquisition proposal.
Amended Bid Details:
Under the amended bid, Microsoft has agreed to cede non-European cloud gaming rights for both existing and future Activision Blizzard games to Ubisoft, its industry rival, for the next 15 years. This pivotal alteration ensures that Microsoft cannot enforce the exclusive release of Activision Blizzard games on its Xbox Cloud Gaming platform nor maintain control over licensing agreements for these titles on competing services.
- Ubisoft to gain non-European cloud gaming rights for Activision Blizzard titles.
- Microsoft relinquishes exclusive release rights and licensing control.
- Ubisoft to license back titles to Microsoft for its cloud gaming platform.
CMA’s Triumph:
The Competition and Markets Authority (CMA) emerges triumphant as its intervention led to the restructuring of the deal. Despite US counterparts and EU regulators offering approval, CMA’s refusal to sanction the original acquisition proves pivotal. This outcome underscores the UK watchdog’s significance in shaping global tech deals.
Revised Transaction:
Microsoft’s official response to the CMA’s apprehensions outlined, “In response to the concerns voiced by the UK Competition and Markets Authority regarding the potential repercussions of the proposed acquisition on cloud game streaming, we are modifying the transaction to encompass a more limited scope of rights.”
CMA’s Continued Scrutiny:
The CMA has embarked on a fresh Phase One investigation of the revised proposal, with an anticipated completion date of October 18th. Sarah Cardell, head of the CMA, emphasized that the new bid significantly differs from the previous one. Activision’s cloud streaming rights outside the EEA (European Economic Area) will now belong to Ubisoft, offering gamers diverse avenues to access their favorite titles.
Ubisoft’s Rise, Microsoft and Activision Blizzard’s Response:
Ubisoft’s shares gained over 9% on the Paris exchange early on Tuesday, showcasing investor confidence in this new development. Similarly, Microsoft and Activision Blizzard observed marginal early trading gains of around 1% in the US market.
Conclusion:
While the revised bid signals Microsoft’s commitment to addressing concerns raised by the UK’s regulatory body, the fate of the deal remains uncertain. The reshaping of terms underscores the intricate dynamics at play when global conglomerates navigate the complex landscape of mergers and acquisitions.
