Microsoft and ABK Considering Pulling ABK From the UK and Offering Enforceable Remedies as Ways Around Activision CMA Block
According to a recent report published by MLex, Microsoft executives are actively exploring ways to close its acquisition of Activision Blizzard King, despite facing a block from the UK. The CMA (Competition and Markets Authority) has currently issued an order which prevents Microsoft from acquiring any interest in Activision, or Blizzard, or King, including their subsidiaries. The order is currently interim and expected to be made permanent soon.
Therefore, in response to this, MLex has learned that Microsoft has hired additional lawyers to find out possible ways to close the Activision deal despite the block from UK’s CMA. One possibility includes ABK exiting the UK and relocating to another European country outside the jurisdiction of the CMA. Through this scenario, Activision will continue to sell its games through a distributor.
Another possibility that Microsoft is exploring is to unilaterally extend the remedies it proposed (and were accepted) to the EU (European Commission) to the CMA. However, something along the lines of those remedies were proposed to the CMA but rejected. This approach will require Microsoft to voluntarily implement measures to address concerns specific to the UK market.
Microsoft is also currently challenging the draft issued by the CMA that prevents them from acquiring any interest in the CMA for 10 years. CMA’s ability to impose a global ban to address concerns in the UK market is the central concern. Microsoft may possibly challenge the CMA’s order and narrow its scope to the UK only and allow the deal to close elsewhere in the world.
Lastly, MLex understands that Microsoft is also looking at the possibility of going ahead with the acquisition itself, and later argue in court that CMA’s draft is “illegal” if challenged by legal action by the UK watchdogs.
A Microsoft spokesperson told MLex that “our priority is pursuing the appeal process in the UK, and we remain committed to constructive dialogue and solutions to address regulatory concerns.” When Satya Nadella, CEO Microsoft, was asked that if the company could go ahead and close the deal, and stop selling products in the UK, the CEO responded, “let’s wait for it all to play out.”
When MLex asked a Microsoft representative on May 12 whether it could close around the UK, they said that it was a “complicated question,” but “at some point we may need to think about it.” However, a spokesperson from Microsoft also advised against reading too much into the comments.
It seems like Microsoft is determined to close its $68.7 billion USD merger with Activision regardless of what they have to do. There are still some roadblocks and approvals they require before it is possible, so stay tuned to MP1st for all the latest updates regarding the Microsoft-Activision deal.
Editor’s Note: We’ve updated the headline to clarify that ABK, as a publisher, is considering exiting the UK and selling its games in the UK through a distributor to close this merger. Microsoft, as a whole, is not exiting the UK market.
Source: ResetEra
Source: MP1st
