Atvi Shares Surge As Microsoft's B Deal Nears Uk Approval Abbo News

Activision Blizzard (NASDAQ: ATVI) Shares Surge as Microsoft’s $69B Deal Nears UK Antitrust Approval

Activision Blizzard, Inc. (NASDAQ: ATVI) shares rose in pre-market trading as Microsoft’s revamped $69 billion acquisition deal for Activision inches closer to receiving antitrust approval from UK regulators.

The Competition and Markets Authority (CMA) has stated that the updated proposal effectively addresses previous concerns regarding potential competition stifling in the growing cloud gaming market. This will enable players to stream games on tablets, phones, and other devices without requiring expensive consoles or gaming computers.

The CMA acknowledged that the updated offer “opens the door to clearing the deal,” although some concerns linger. Microsoft Corporation (NASDAQ: MSFT) has put forth remedies that the watchdog provisionally believes will resolve these issues. Regulators are currently seeking feedback on these fixes before reaching a final decision.

This breaking development underscores that the UK watchdog is getting closer to reversing its earlier decision to block Microsoft from acquiring Activision Blizzard, known for popular gaming franchises like Call of Duty and World of Warcraft.

“The CMA’s position has been consistent throughout — this merger could only go ahead if competition, innovation, and choice in cloud gaming was preserved,” CEO Sarah Cardell said. “In response to our original prohibition, Microsoft has now substantially restructured the deal, taking the necessary steps to address our original concerns.”

Since the initial announcement of the deal in January 2022, Microsoft has garnered approvals from antitrust authorities in over 40 countries, including a crucial nod from the European Union. In a significant concession, Microsoft agreed to allow users and cloud gaming platforms to stream its titles without paying royalties for ten years.

However, the deal faced obstacles in the UK, where regulators expressed concerns that Microsoft’s acquisition of Activision Blizzard (NASDAQ: ATVI) could harm competition and gamers’ interests. To address these concerns, both companies extended the deal’s original July deadline to mid-October and engaged in discussions with the British regulator.

Microsoft President Brad Smith expressed optimism about this positive development in the UK watchdog’s review process, stating,

“We presented solutions that we believe fully address the CMA’s remaining concerns related to cloud game streaming, and we will continue to work toward earning approval to close before the October 18 deadline.”

In the restructured deal, Microsoft has agreed to sell cloud streaming rights for all current and new Activision games released over the next 15 years outside of the EU and three other European countries to French game studio Ubisoft Entertainment.

As of the latest update, Activision Blizzard (NASDAQ: ATVI) shares are trading at $94.02, up 1.81% from the previous trading session. Simultaneously, Microsoft Corporation (MSFT) surged 0.30% to $320.48.