microsoft 's acquisition of activision blizzard is facing increasing international scrutiny as the UK Competition and Markets Authority has launched a preliminary investigation to determine whether the merger will result in a significant reduction in competition, through higher Price, lower quality or reduced choice to harm competition. According to Associated Press , the UK antitrust regulator is currently collecting feedback to decide whether to launch a formal investigation in September.
While this timeline doesn't give them much time to act before the expected merger completion date of July 2023, it's key to note that neither CMA nor the FTC (at least March) will actually need to approve Transactions can only be made - rather, their regulatory oversight gives them the power to intervene, even after a formal acquisition, so time is not necessarily a limiting factor. Although both are American companies, Activision and Microsoft are not immune to the laws and regulations of other countries in which they do business unless they want to exit that market entirely, which is rarely an attractive prospect. Both points have come up before, with the same Competition and Markets Authority ordering Facebook to sell Giphy last November, more than a year after acquiring Giphy, although the ruling is still being appealed.
If the CMA continues its investigation and presses ahead with a full investigation, Any ruling on the merger is likely to block the deal, although it is more likely to result in some concessions being made to appease the regulator while still allowing the deal to go through. Microsoft, for its part, has pledged to fully cooperate with the investigation, with CNBC citing Microsoft corporate vice president and general counsel Lisa Tanzi as noting that Microsoft and Activision's stocks have been barely affected by news of the potential investigation, suggesting shareholders remain unconcerned.
Lisa Tanzi, via CNBC Theory:
We will fully cooperate with the CMA’s merger review. We anticipate and believe it will be appropriate for regulators to closely monitor this acquisition. We've been clear on how we plan to run our games business and why we believe this deal will benefit gamers, developers and the industry. We are committed to answering the questions raised by regulators and ultimately believe that a thorough review of will help complete the transaction with broad confidence and will be beneficial to competition. We continue to believe the transaction will close in fiscal 2023 as originally anticipated.
