Acquisition of Activision Blizzard by Microsoft: Deal or No Deal?

In 2022, the tech conglomerate, Microsoft announced its intent for collaborating with one of the top world-renowned gaming companies, Activision Blizzard for £50.5 Billion. It was pretty big news that actually shook the world, and it was marked as one of the most influential deals in the gaming world’s history. Now, the company is trying to persuade regulators from all across the world to clear their hands from the deal because the deal is facing many legal hurdles and lawsuits from all across the world. Why is that? Let’s find out.

Why is the Activision Acquisition taking so long?

The acquisition of Activision Blizzard by Microsoft has been in the news ever since Microsoft showed interest in taking over the gaming company. The merger was supposed to happen on 18th July 2023, but the original deadline has been pushed by three months, marking the newer date as 18th October.

Many competitors like Sony, the UK’s Competition and Markets Authorities wanted to block the deal because of the impact on the gaming industry it will have, but then they decided to sit and talk with both Microsoft and Activision to sort it out. The deal even had to face the court but got a clear chit when the federal judge ruled in favour of allowing Microsoft to go ahead with the deal. So, hopefully, we will soon find out when Microsoft buys Activision Blizzard and forms a powerful union.

Why and Which Countries are against the Merger? 

Starting with the US, the Federal Trade Commission (FTC) initially wanted to block the deal but only filed a temporary restraining order to stop the merger from happening. On July 11, 2023, FTC lost the case in the district court as they could not prove their claim that the merger would significantly lessen the competition. After this, Microsoft and Activision Blizzard requested FTC to withdraw their case, so that both companies can persuade the US antitrust regulator to accept a settlement.

In the UK, the Competition and Markets Authority (CMA) blocked the deal in April 2023 and said that they would not give the green light to the deal because of its heavy consequences on the cloud gaming market. Microsoft and Activision have appealed the decision but the CMA is trying to put as much delay as possible.

The European Union’s European Commission did file a complaint in February 2023, concerning the impact this deal would make in the console gaming industry. However, they eventually approved the acquisition of Activision Blizzard by Microsoft in May, stating that it could be a significant move for the cloud gaming sector as compared to its current scenario.

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Which Countries are supporting the Merger?

While First-World Countries like US and UK are trying to break the acquisition of Activision Blizzard by Microsoft, many other countries are supporting them to see enhanced improvement in the gaming sector. The list includes the European Union, Ukraine, Saudi Arabia, Brazil, Serbia, Chile, Japan, South Africa, South Korea, and China.

Serbia, Brazil, Saudi Arabia, and Chile were the first countries to accept the merger in 2022 and fully support the acquisition of Activision Blizzard by Microsoft. The other countries came to acceptance by the spring of 2023 and beyond. 

Winning these countries’ vote of confidence is undoubtedly a big win for both companies but without the UK’s Competition and Markets Authority’s approval, the biggest deal of the gaming industry can’t go through.

Microsoft to bring its Pro-Union Approach to Activision Blizzard

On 6th January, Microsoft ran an ad in the Washington Post mentioning the acceptance of its union, co-signed by the Communication Workers of the American Union. The ad stated how the company will remain committed to creating the best workspace for employees and its workers in the technology sector. 

And, how both the labourers and management will be able to voice their issues, benefitting everyone, customers, shareholders, and employees, altogether. At the last, the ad also mentions how they will bring such culture into Activision Blizzard so the company can improve their working conditions and make a better environment.

This stunt was basically pulled to showcase to FTC that the acquisition of Activision Blizzard by Microsoft is actually a good move, not only for Activision’s enhancement but also for the gaming world. And, this power union will eventually promote a healthy working space for employees, increase economic growth and benefit America’s innovation sector.

What will happen next?

Microsoft and Activision Blizzard will probably want to pursue both the UK and US regulators like they did with the EU and China board, by agreeing to their certain demands. It will be challenging but they will enter the talks with both the FTC and CMA boards to find a possible solution so that they can finally see their deal through. The CMA will possibly reach a final verdict by the end of August.

The lawsuit filed in California will definitely be the bigger hurdle to jump through and the matter will likely reach the Federal Court for a final decision. Both Microsoft and Activision are prepared to try everything they can to resolve both the cases, but only time will tell whether the acquisition of Activision Blizzard by Microsoft will transpire profusely or not.

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Conclusion

While the news of the acquisition of Activision Blizzard by Microsoft was enormous news in 2022, the lawsuits and hurdles both companies are going through have made the deal a bit delayed than it was supposed to happen. UK and US are the two main countries that are making it difficult for the deal to pull through but both companies are trying to resolve this issue as soon as they can. And, hopefully, people will be able to see the biggest deal of the gaming sector actually go through on 18th August 2023. For more such updates, visit Findwyse.

FAQS

Why did Microsoft acquire Activision Blizzard?

Microsoft showed interest in buying Activision Blizzard to enhance its presence even more in the gaming sector and the metaverse, giving tough competition to its competitors.

How much money Microsoft is paying to acquire Activision Blizzard?

Microsoft is paying £50.5 Billion to acquire Activision Blizzard but the deal has been delayed for three months because of all the cases and lawsuits being filed against it.

Who blocked Microsoft from purchasing Activision Blizzard?

The Federal Trade Commission(FTC) of the US, and the UK’s Competition and Markets Authorities are trying to block the acquisition of Activision Blizzard by Microsoft from taking place.