Analysts view UK antitrust warning as ‘a signal Xbox Activision deal is close to being approved’
The UK Competition and Markets Authority (CMA)’s provisional findings on Microsoft‘s proposed acquisition of Activision Blizzard are a sign that deal is close to being approved.
That’s according to Wedbush Securities analysts Nick McKay and Michael Pachter, who suggested in a research note that the regulator’s antitrust warning is “a signal that the UK knows it has a losing legal argument”.
Following a five-month investigation, on Wednesday the CMA said it had provisionally found that the $69 billion deal could reduce competition and “result in higher prices, fewer choices, or less innovation for UK gamers”.
The regulator outlined several potential structural remedies that could help clear a path to it approving the deal, including a “partial divestiture of Activision Blizzard” that could see it selling off the part of the company that deals with Call of Duty, or even the entire Activision business unit.
However, the CMA said it would also consider behavioural remedies, such as Microsoft’s offer to make Call of Duty available on other platforms post-merger, although it views these as less favourable than structural ones which rarely require monitoring and enforcement once implemented.
In December, the US Federal Trade Commission announced plans to file a lawsuit in a bid to stop the merger, and last week the EU issued Microsoft with a charge sheet setting out its objections to the deal too.
In their note to investors, Wedbush’s McKay and Pachter suggested UK, EU and US regulators are involved in a game of one-upmanship.
“The political impact of today’s CMA action is perhaps the most important,” they wrote. “We read today’s release as a signal that the UK knows it has a losing legal argument. In our view, the FTC figured this
Read more on videogameschronicle.com
