Activision Stock (NASDAQ:ATVI)
During Friday’s midday trading session, shares of Activision Blizzard (NASDAQ:ATVI) soared by more than 5% after the UK’s antitrust authority “provisionally decided” that the planned deal would not diminish competition in the console gaming industry.
The UK’s competition watchdog said it had “provisionally determined” that Microsoft’s planned purchase of Activision Blizzard, Inc. would not significantly reduce competition in the console gaming market.
The planned merger would see Microsoft (NASDAQ:MSFT) purchase Activision (ATVI) for $69B in cash. However, the regulatory body did not comment on how this may affect the cloud gaming business.
On April 26th, the CMA will provide its concluding report.
Microsoft’s vice chairman and president, Brad Smith, has expressed gratitude for the CMA’s extra research.
Smith said, “Its update reflects a growing agreement by those with access to the most recent data that this merger would produce more competition in the console market, not less.
On Friday, Microsoft stock was up by a bit.
The CMA had previously said the merger would lead to a “significant decrease of competition” in the UK game console and cloud gaming service markets. Today’s news represents a U-turn.
Microsoft lawyers recently met with the government to explore potential concessions to close the agreement.
The CMA’s concerns would be addressed with “effective and readily enforced measures,” Microsoft Corporate Vice President and Deputy General Counsel Rima Alaily told Seeking Alpha last month.
Alaily said, “Our resolve to offer long-term 100% equal access to Call of Duty to Sony, Nintendo, Steam, and others retains the advantages to players and developers and fosters competition in the industry.”
The merger of Microsoft and Activision has been scrutinized worldwide, notably by the US Federal Trade Commission.
The agreement was authorized in Brazil in October, and developers in China claimed to have responded the following month favorably. Seeking Alpha earlier reported that a third party in China had reservations about the agreement.
Microsoft has inked partnerships with Nintendo (OTCPK:NTDOY) and Nvidia to port titles to their platforms, including Call of Duty, making the popular game available to an additional 150 million gamers.
Sony, the lone holdout, has frequently opposed the agreement.
Morgan Stanley recommended last month that clients purchase Activision stock because the company might be targeted by activists if the Microsoft merger fails.
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