Microsoft has made a significant change to its proposed acquisition of the Call of Duty developer, in another attempt to finalize it.
The company hopes to buy Activision Blizzard for $69 billion, or £54 billion, in what would be one of its biggest sales ever. However, it has faced intense regulatory scrutiny, including from the UK’s Competition and Markets Authority, which has tried to block the deal.
Now it is said that a new proposal for the process of the takeover has been sent in order to convince the CMA that the deal will go through. However, it was stressed that there is still no “green light” on the deal.
That comes as regulators confirmed on Tuesday that Microsoft’s original plan to buy the computer games maker “cannot go ahead.”
Under the new proposal, Microsoft would sell its rights to offer games over the cloud for new or existing Activision PC or console games outside of the European Economic Area (EEA) for the next 15 years.
Instead, the company will sell those rights to Ubisoft, a rival developer known for the Assassin’s Creed and Far Cry series of games.
This is to ensure gamers have access to Activision Blizzard games, including on non-Microsoft consoles and computers.
The CMA will now launch a new investigation into this deal, a so-called Phase 1 investigation.
CMA Chief Executive Sarah Cardell said: “The CMA confirmed today that Microsoft’s originally planned acquisition of Activision cannot proceed.”
“Separately, Microsoft has announced a new and restructured deal that is materially different from what was previously on the table
“It’s not a green light. We will carefully and objectively review the details of the restructured deal and its competitive impact, including in light of third-party comments.”
Brad Smith, President of Microsoft, said: “As part of the restructured transaction, Microsoft will not be able to publish Activision Blizzard games exclusively on its own cloud streaming service, Xbox Cloud Gaming, nor will the licensing terms of Activision Blizzard games to exclusively control for competitors.” Services.”
It marks a new twist in the case, the biggest fight the CMA has fought since it gained new powers after Brexit. At times it looked as if the case would only end after a court battle.
In January 2022, Microsoft announced that it plans to buy Activision Blizzard, the company behind the Call Of Duty and World Of Warcraft games, for a staggering sum.
When the UK was still a member of the EU, a deal of this magnitude would have been scrutinized by regulators in Brussels. But post-Brexit, the CMA now has the power to investigate such deals itself.
Although both companies are US companies, both have significant operations in the UK and their merger could have a significant impact on competition there.
Bobby Kotick, CEO of Activision Blizzard, said, “For us, nothing material changes as a result of this divestment: our merger agreement with Microsoft, the closing period and the cash consideration payable on closing for each Activision Blizzard share remain the same.”
“We will continue to work closely with Microsoft and the CMA throughout the remainder of the review process and are committed to helping Microsoft clear any final hurdles as quickly as possible.”
“The journey has been longer than expected and I’m very proud of how focused everyone has been on delivering great games.”
Additional reporting by agencies