There has been much publicity over the acqusition of Activision by the technology giant, Microsoft, over the last year or so. It seems, now, the heat is potentially turning up as Microsoft may be forced to pull Activision games from the UK market in order to complete it’s merger.
Despite facing resistance from the United Kingdom’s Competition and Markets Authority (CMA), the company remains comitted to finalising its takeover of Activison. In response to the CMA’s block on the merger, Microsoft has filed an appeal with the Competition Appeal Tribunal, and a court hearing for the appeal is scheduled for July, marking a significant event in this ongoing process.
However, Microsoft is also exploring alternative options that do not rely on the CMA’s decision. One notable strategy is the possibility of Microsoft choosing not to sell Activision games in the UK. This would represent a significant shift in their strategic approach, considering that the UK market is crucial for both the Call of Duty series and Xbox.
Another option for Microsoft is to proceed with the merger despite the legal challenges, which could potentially expose them to future lawsuits from the CMA. Currently, both Microsoft and Activision are prohibited from engaging in any merger talks for the next decade, as dictated by the CMA’s ruling. However, Microsoft could choose to ignore this ruling and proceed with the merger.
In the United States, Microsoft faces another obstacle in the form of the Federal Trade Commission (FTC), which has expressed its disapproval of the buyout and has taken legal action to impede it. Speculations suggest that Microsoft might either disregard the FTC’s ruling and face subsequent penalties or withdraw from the US market, although the latter scenario is highly unlikely considering the critical role of the US market for Microsoft.
There is also a possibility that the FTC might come under pressure to approve the deal, as all other countries involved, except the UK, have given their approval. If the FTC refuses to approve the acquisition, it could effectively derail Microsoft’s plans, resulting in a costly and unsuccessful endeavor. Therefore, the upcoming months will be crucial in determining the future of Microsoft’s ambitious acquisition.
