The provisional findings of the UK Competition and Markets Authority (CMA) on the proposed acquisition of Activision Blizzard from Microsoft they would be a signal that the agreement is close to approval.
That’s according to analysts at Wedbush Securities Nick McKay e Michael Pachterwhich in a note suggest that the supervisor’s antitrust warning is “a signal that the UK knows it has a losing legal argument”.
Following a five-month investigation, the CMA said on Wednesday it had tentatively found the $69 billion deal could reduce competition and “result in higher prices, less choice or less innovation for gamers.” United Kingdom”.
The regulator has outlined several potential structural remedies that could help pave the way for approval of the deal, including a “partial divestment of Activision Blizzard” which could see the sale of the part of the company that deals with Call of Duty or even the entire business unit of Activision.
The CMA said it would also consider behavioral remedies, such as Microsoft’s offer to make Call of Duty available on other platforms after the merger, although it sees these as less favorable than structural remedies, which rarely require monitoring and one-time enforcement. once implemented.
In December, the US Federal Trade Commission announced plans to file a lawsuit in an attempt to block the merger, and last week the EU sent Microsoft a prosecution document setting out its objections to the deal.
In their note to investors, Wedbush’s McKay and Pachter suggest that regulators in the UK, the EU and the US are in a race to the top.
“The political impact of today’s CMA action is perhaps most important,” they wrote. “We read today’s statement as a signal that the UK knows it has a losing legal argument. In our view, the FTC figured this out late last year and rushed to file a lawsuit to block the merger in hopes of being the first to wring concessions from Microsoft.
“We believe the CMA came to the same conclusion during its review and has expedited his formal objection to the deal and proposed remedies to get you ahead of the FTC and get a bragging rights. The FTC has not yet proposed remedies and the CMA, by listing onerous structural remedies, has positioned itself as a ‘dragon slayer’ in this action.
Analysts said they are considering the CMA’s announcement “as a signal that the merger is close to approval” and that they expect it to be approved by mid-May.
“We continue to believe that Microsoft will accept all behavioral remedies proposed by the CMAexcept to make Activision content available on the services of cloud gaming of the competition. This sticking point could delay a favorable resolution in the UK, but we expect the FTC and the European Union to use it to gain concessions of their own.”
Activision Blizzard’s chief executive says regulators are “confused” about who competes with whom in video games.
In a statement provided to VGC, Microsoft’s corporate vice president and deputy general counsel Rima Alaily He said that: “We are committed to offering effective and easily applicable solutions that address the concerns of the CMA”.
The CMA invites interested parties to respond to the list of proposed remedies by February 22 and to respond to its tentative findings by March 1. The final report on the operation is expected on 26 April.
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