Microsoft’s $69 Billion Deal Set for EU Nod After UK Veto (1)

Microsoft Corp.’s $69 billion takeover of Activision Blizzard Inc. is set to be approved by the European Commission, just weeks after Britain’s merger regulator delivered a potentially fatal veto of the gaming industry’s biggest ever deal.

The European Union’s antitrust arm is expected to give its blessing to the deal as soon as next week after accepting Microsoft’s proposals to permit rivals to offer titles such as Call of Duty on their cloud gaming platforms, according to two people familiar with the matter who asked not to be named because the decision isn’t public.

The EU decision runs counter to the findings of the UK’s Competition and Markets Authority, which said last month the remedies didn’t allay its antitrust concerns. The UK watchdog’s shock veto all but closed off any path forward. Still, the companies have pledged to challenge the CMA’s decision and are fighting a US lawsuit against the transaction.

The commission and Microsoft declined to comment. Reuters reported earlier that the decision would be announced on May 15.

Margrethe Vestager, the EU’s antitrust commissioner, has repeatedly signaled that her team may reach a different conclusion to the CMA, which has started to flex its muscles as a global regulator after Britain’s departure from the EU.

Read More: Microsoft’s Activision Deal Chances Evaporate After UK Blow

When the US Federal Trade Commission sued to block the merger in December, Microsoft maintained it still had avenues for approval. The Xbox maker’s plan was to persuade UK and EU authorities to accept a global behavioral remedy, then return to negotiations with the FTC. If the US regulator refused to budge, the company wagered it could persuade a US judge that those binding global remedies resolved the competition concerns.

That strategy suddenly became much more challenging with the UK decision reinforcing the FTC’s concerns. As it stands, the FTC trial isn’t set to begin until August and isn’t likely to produce a decision till the end of the year.

The UK appeal process is also drawn-out and rarely changes the outcome as the tribunal only reviews the decision’s legality. When Meta Platforms Inc. appealed a UK order to unwind its acquisition of Giphy Inc., for example, the Competition Appeals Tribunal took eight months to issue a decision – and sent the case back to the UK regulator, which upheld the block.

(Updates with deal details throughout)

--With assistance from Katharine Gemmell and Stephanie Bodoni.

To contact the reporters on this story:
Peter Chapman in Brussels at pchapman10@bloomberg.net;
Samuel Stolton in Brussels at sstolton@bloomberg.net

To contact the editors responsible for this story:
Jeremy Hodges at jhodges17@bloomberg.net

Peter Chapman

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