Microsoft has restructured its proposed $69 billion acquisition of Activision Blizzard, the developer behind Call of Duty, by offering to sell the game’s streaming rights to Ubisoft Entertainment. This move is an effort to gain approval from the United Kingdom’s Competition and Markets Authority (CMA) for the deal, which is one of the largest in the tech industry’s history.
Activision shares saw a 1.1 percent increase, while Microsoft shares rose by 0.7 percent in New York. Ubisoft, listed in Paris, closed 8.8 percent higher, marking the largest gain on the pan-European STOXX 600 index.
The CMA announced a new investigation into Microsoft’s revised bid, setting an October 18 deadline to decide on the deal or to extend the review further. Both companies have agreed to extend the transaction’s deadline to the same date.
Microsoft’s initiative to acquire Activision, which includes franchises like Overwatch and Diablo, has already received approval from antitrust authorities in 40 countries, including the European Union. The acquisition faced challenges in the United States, but the Federal Trade Commission lost a court battle, effectively clearing a significant hurdle for the deal.
In the UK, however, the deal was initially blocked due to concerns about competition in the cloud gaming market. Microsoft’s revised proposal involves not releasing Activision games exclusively on its Xbox Cloud Gaming service and not exclusively controlling licensing terms for rival services.
As per the new terms, Ubisoft, a French gaming company, will acquire the cloud streaming rights for Activision’s games globally, excluding Europe, where Ubisoft will receive a non-exclusive license. The deal will cover existing and new Activision games for the next 15 years.
Activision CEO Bobby Kotick stated in a blog post that the sale of streaming rights would not substantially change the company’s operations.
The CMA, considering the new proposal, described it as “substantially different” from the original. Sarah Cardell, CEO of the CMA, emphasized that this does not guarantee approval and that a detailed assessment of the deal’s impact on competition will be conducted.
The decision to initiate a new investigation rather than approve the deal was unexpected and suggests a possibility of another extended review. Alex Haffner, a competition partner at UK law firm Fladgate, expressed optimism that Microsoft’s revised approach will ultimately receive regulatory approval from the CMA.
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