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Microsoft-Activision Blizzard Restructured Deal Could Face Fresh Probe in UK

The CMA's decision to agree to reconsider the deal at this stage, when an appeal was imminent, has surprised advisers on the deal.

Microsoft-Activision Blizzard Restructured Deal Could Face Fresh Probe in UK

The CMA became the first regulator to block the $69 billion deal in April

Highlights
  • That statement came less than an hour after a US court approved the deal
  • The head of Britain's CMA had defended decision to block deal
  • The timing of next steps would be determined in due course, it said
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Britain's competition regulator said on Wednesday a restructured deal between Microsoft and Activision Blizzard could satisfy its concerns, subject to a new investigation, a climbdown in its opposition to the biggest gaming deal in history. 

The Competition and Markets Authority (CMA) became the first regulator to block the $69 billion (nearly Rs. 5,65,750 crore) deal in April, drawing fury from the two companies, but said on Tuesday it could look again at the merger if it was restructured to address its concerns. 

That statement came less than an hour after a US court ruled that the deal to buy the Call of Duty maker could go ahead, leaving Britain's regulator isolated. 

"Whilst merging parties don't have the opportunity to put forward new remedies once a final report has been issued, they can choose to restructure a deal, which can lead to a new merger investigation," the CMA said on Wednesday.

"Microsoft and Activision have indicated that they are considering how the transaction might be modified, and the CMA is prepared to engage with them on this basis." 

It added that the discussions remained at an early stage and the timing of next steps would be determined in due course. 

The CMA's decision to agree to reconsider the deal at this stage, when an appeal was imminent, has surprised advisers on the deal and many competition lawyers.

"It is really an unprecedented and dramatic turn of events," said Alex Haffner, competition partner at UK law firm Fladgate. 

The head of Britain's competition regulator, Sarah Cardell, had defended its decision to block the deal when she was asked by the BBC if there was any way the mega-merger could go ahead after its "final report" blocked it. 

"We have taken a decision to block the deal," she said.

© Thomson Reuters 2023


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