UK blocks $69 billion Microsoft-Activision deal amid cloud gaming concerns
1 min read . Updated: 26 Apr 2023, 07:18 PM IST
PremiumMicrosoft said in a statement it remained fully committed to this acquisition and would appeal.
British regulators have blocked Microsoft's $69 billion acquisition of "Call of Duty" maker Activision Blizzard amid concerns it would stifle competition in the fast-growing cloud gaming market. The all-cash agreement - one of the biggest tech deals in history - had also faced stiff opposition from rival Sony and was scrutinised by regulators in the US and Europe.
A report by the Competition and Markets Authority said that “the only effective remedy" to the substantial loss of competition “is to prohibit the merger".
The merger had sparked fear that it would give Microsoft control of popular game franchises like Call of Duty, World of Warcraft and Candy Crush. The companies have vowed to appeal, with Microsoft asserting in a statement that it remained fully committed to this acquisition.
Meanwhile Activision said it would "work aggressively" with Microsoft to reverse it. CEO Bobby Kotick told staff it was not "the news we wanted - but it is far from the final word on this deal". Activision Blizzard fell 10.1% in pre-market trading after the news broke.
If the deal is eventually blocked, Microsoft could be on the hook for a break up fee of as much as $3 billion. “The CMA’s decision rejects a pragmatic path to address competition concerns and discourages technology innovation and investment in the UK," said Brad Smith, vice chair and president of Microsoft.
(With inputs from agencies)