The UK Blocked The Microsoft-Activision Merger, So What Happens Next?

gamespot.com:

Usually in a breakup, you might lose a sweatshirt or some furniture, but Microsoft would have to pay $3 billion if the deal doesn't go through.

By Eddie Makuch on

Microsoft is in the process of attempting to complete one of the biggest acquisitions in history, a $68.7 billion buyout of Call of Duty company Activision Blizzard. The deal has been cleared in a number of countries already, but in a major blow to Xbox, the UK's Competition & Markets Authority announced on Wednesday that it would block the deal due to concerns about cloud gaming. The CMA initially held concerns about the console marketplace before reconsidering. However, the cloud gaming market proved to be a sticking point. The decision was a shock to many industry-watchers, who believed the CMA would give it the green light.

Microsoft and Activision Blizzard are already in the process of appealing and pushing to get the deal done. But what if, after all of that, the deal still doesn't go through? Here's what happens next, and how Microsoft could be on the hook to pay billions in a breakup fee.

In its statement following the CMA's announcement, Activision Blizzard said it will work with Microsoft «aggressively» to reverse the decision on appeal. «Global innovators large and small will take note that--despite all its rhetoric--the UK is clearly closed for business,» Activision Blizzard said. Microsoft president Brad Smith said Microsoft continues to be «fully committed» to getting the deal done and will appeal the decision. «We're especially disappointed that after lengthy deliberations, this decision appears to reflect a flawed understanding of this market and the way the relevant cloud technology actually works,» Smith said.

Wedbush Securities analyst Michael