Microsoft tracking toward EU approval of $69B Activision deal - report

Rob Stothard

Microsoft (NASDAQ:MSFT) is reportedly headed toward European Union antitrust approval of a $69B bid for Activision Blizzard (NASDAQ:ATVI), thanks to its offers to license videogames to its competitors.

That suggests what looked like a key hurdle will instead clear the way for Microsoft's (MSFT) biggest-ever acquisition, and set up a bigger competitive battle with Sony (SONY) and Tencent (OTCPK:TCEHY).

The deal is likely to win an OK from the European Commission, Reuters reports citing multiple sources.

And while Microsoft likely won't have to shed assets, in addition to the licensing deals it may need to agree to behavioral remedies, according to the report.

"Our commitment to grant long-term 100% equal access to Call of Duty to Sony, Steam, Nvidia (NVDA) and others preserves the deal's benefits to gamers and developers and increases competition in the market," Microsoft said.

As momentum seemed to build toward approval, Activision Blizzard (ATVI) rose premarket Thursday and built on that before closing up 2.6% in the regular session. Microsoft (MSFT) gapped up in the last two hours of trading to finish up 2%. For its part, Sony (SONY) also made late gains to pare its daily loss to -0.4%.

Earlier reports noted the EC wasn't likely to demand Microsoft sell assets to win deal approval.

Comments

[Ovidiu_Owner]

Microsoft is one of the most corrupted companies on Earth. They have by the balls a lot of politicians in US and EU..they dictate the US politics, together with the other Davos mega corpos. This s**t will go trough and show how corrupted capitalism has become and how much of a circus antitrust entities always been.
Antitrusts are playing the " resistance game " but everything is already plotted from the start.
US seems to decay more and more... corruption , greed and mega-debt push for the fall of the Empire, while China laughs in the shadow of Everest..
You need to get your s**t right people,or we will have to learn Chinese sooner than you think !
The Greedy MSFT is buying the biggest video-game company on Earth just like that, snapping OpenAi when should be a non-profit...Everything is fine we're living all in a meritocracy ...not.

[fshoutofwtr]

@Ovidiu_Owner The only people that say crap like this are short the stock. Take your nonsense elsewhere. It’s video game company for goodness sakes!

[TechStock Hunter]

@Ovidiu_Owner It would help if you actually had something to say.

[Ovidiu_Owner]

@techstock Hunter ,@fshoutofwtr I worked in the AAA video games for over 15 years, for one of the most well known companies in the industry...I know exactly what I am saying. ATVI is the megalodon of the video games industry and MSFT should have no right to buy it. It will give XBox a massive competitive advantage and will disrupt a massive part of the video games industry. I bet none of you ever worked in the industry or even played a game in the last 10 years. You're all here speculators to sell the system for some cash. F**k democracy, f**k free market if I can make a 30% on my money.Even Buffett is so greedy that even when he knows it's insider information from his friend Bill G, is still going for the cake . I have no shares in either MSFT nor short the stock. I am just following ATVI for some time ,not to buy or sell, but due to their massive scandal they had and noticed the article here. The fact that you are greedy to make a buck more on MSFT does not mean I am not right! The US antitrust s**t is corrupted af !

[BigRigButters]

Regulators making a stink over this but don't mind Amazon's predatory practices. Ridiculous.

[GetRichQuick101]

What's the arbitrage sitting at?

[browndlee]

@GetRichQuick101 The deal’s $95 cash. If it doesn’t close ATVI gets $3 billion from MSFT. So there’s plenty of concern it won’t close.

[CyclocrossSam]

Why isn’t this trading closer to $95?

[msawi11]

@CyclocrossSam FTC headed by Lina Kahn

[Julian Beatty]

@CyclocrossSam UK is never going to approve this.

[sdavid04191]

AMZN, GOOG... At what point do we admit that super consolidation has already created monopolies. Is it fair to MSFT to deny them access to the 21st century phenomenon of mega companies? This is different than the consolidation in the drug industry as medical care is a necessity of life that cannot be delegated only to the rich. If someone wants to pay to play games let them pay the going price. If they think MSFT is charging too much to play let them not play or go to one of the remaining suppliers. Frankly, we would all be better off if people stopped playing so many games and did something productive.

[combatcorpsmanVN]

@sdavid04191 Agree. There really is a life outside of games. I find it hilarious that the most proficient 'gamers', in some cases, can't get a handle of algebra.

[Ovidiu_Owner]

@sdavid04191 I agree..politicians should also ban NFLX and movie watching more than 1h a week , ban alcohol, drugs including cannabis, expand the pension retirement age to 75 , introduce obligatory marriage and minimum 3 kids per family and minimum 12 h of work per day, 6 days a week...( this way the rich get richer, investors are happy , politicians can borrow money 1000x GDP)
On top of all that they could also introduce mandatory acquisition of minimum 3 assault rifles per family , just to make things a little bit spicier for the day...

[LifelongMetsfan1]

Hmm.. so even though the game Call of Duty is the property of the company MicroSoft is buying MicroSoft will not have exclusive rights to the game? If I am understanding that right I really, really dislike this regulators even more. Even regulatory body that a purchasing company needs to go through wants a piece of the pie? Haha.. what will the Chinese regulatory bodies want for their approval?

[jculley]

@LifelongMetsfan1 your reading comprehension is terrible. You are 100% wrong in your understanding of what the regulators want in this deal.

[LifelongMetsfan1]

@jculley BREAKING NEWS! $$$$ Chinese Regulators say they will not approve MicroSoft deal UNLESS Chinese soldiers depicted in game ALWAYS win battles. MicroSoft pledges to alter game source code to accommodate Chinese demand. $$$$

[Blowback2]

@LifelongMetsfan1 😂

[FirstFIREWealth_P01135809]

MSFT the best megacap tech stock.

[SecularTrader]

@FirstFIREWealth Not to mention when Bing and Microsoft Office will be upgraded with ChatGPT

[NVE$TOR]

@SecularTrader lmao ChatGPT is garbage. Bing always will be trash, no amount of AI or money will change that

[BigRigButters]

@NVE$TOR Is that why Bing is the second largest search engine on the planet? Get real.

[Natturner1966]

In at $72. Just waiting. I can do that and not mess it up.

[goodfellasfinancial]

@Natturner1966 added all the way up until last week or earlier this week in 76s...long from 35 :O

[Natturner1966]

@goodfellasfinancial I think you’re going to do well. Smart move if the deal ultimately goes through.

[goodfellasfinancial]

@Natturner1966 if it doesnt, I'm also not worried. Stock price was over 100 and break up fee is huuuge!

[Bruce Bohannon]

May be sad someday I don't own more ATVI.

[Lbastie64]

A VERY EXPENSIVE ACQUISITION for an old game studio. Crazy

[apalmer94]

@Lbastie64 what’s really crazy is how you really seem to believe what you’re saying. Old game studio? They’re a huge publisher that produces the best selling game year after year. If Microsoft is able to close this deal, they position Xbox extremely well in gaming. They will likely be able to develop their own mobile game store, and that’s huge. Who cares how old a company Activision Blizzard is? They have an enormous catalog of games that will bolster Game Pass’ offerings. This would be a game changer for Xbox being able to compete.

[Lbastie64]

@apalmer94 ask Gen Y gamers what they think about ATVI... It is for boomers.

And again, 69B$ was a price set when assets were worth 2x current values

[NVE$TOR]

@Lbastie64 COD sucks and the rest of ATVI content is trash. MSFT should've bought smaller studios with actual potential rather than this dumpster fire

[FaultyR0M]

If CoD cannot be Xbox exclusive (can't even release earlier on Xbox or have special perks) then this is not such a good deal. It would be alright if it didn't cost $69b but for that price they are taking on the risk of future CoD releases (the future versions might not be as popular as in the past, thonk Medal of Honour series, but still costs millions to develop) but they don't see much of a benefit.

[Victor Nettoyeur]

@FaultyR0M In fact, it's best for MSFT if it can release games for all kinds of gaming platforms because it loses 200usd on each Xbox.

[RSI Raistlin]

@FaultyR0M Thats not even in the same time zone as correct. CoD has not been a console seller title in years. So making it xbox exclusive wouldnt have as much value as you think. The point is the value they are getting in IPs for 69B. If I gave you 69B tomorrow you could not replicate what ATVI is. Its not possible because of the long term value of all its IPs. So instead of cash in the bank, they are buying a cash machine with highly valued IPs.

[apalmer94]

@FaultyR0M I think it kind of stinks that MS won’t be able to make CoD exclusive if they can close the deal just for the simple fact that they would have paid all that money, only to be forced to put it on other platforms. That said, CoD, as important as it is, isn’t the most important piece in all of this. They (MS) will obviously still be getting all of the revenue generated from CoD on the other platforms but in addition to that, they will be acquiring the rest of ABK’s enormous cache of video game IP. They will likely be able to put a huge portion of those games into Game Pass, which should cause subscriptions to skyrocket. Plus, they get King’s mobile games which is a huge feather in their cap that will allow them to set up a mobile game store to try to compete with the App Store and Google Play.

As an Xbox fan myself, I used to be a bit bummed out that CoD wouldn’t be exclusive since PlayStation has so many exclusives of their own. But at the end of the day, it makes all the sense in the world to keep it multiplat, especially since that seems to be a huge point of contention for regulators.

[GregJuan]

duh... EU just needed palms greased...

[Chris Lau]

@GregJuan $MSFT paid EU with those $1.00 XBox passes.
ATVI buy. PT...$95.

[thisisit123]

@Chris Lau Probability the deal goes through, and they actually pay 95 a share though?

[Chris Lau]

@thisisit123 The market does not think so (given ATVI's discount). Elsewhere with $AMZN / $IRBT, I expect amazon to re-negotiate on the deal or walk away, paying the small penalty.