US Court Approves $69B Microsoft-Activision Merger: FTC to Challenge Verdict?

US Court Approves $69B Microsoft-Activision Merger: FTC to Challenge Verdict?

Activision Blizzard And Microsoft Corporation

The looming $69 billion Microsoft-Activision deal is on track to meet its deadline and close ahead of schedule. A US judge handed down a favorable ruling on Tuesday, dismissing the Federal Trade Commission’s (FTC) plea for a preliminary injunction and clearing the way for the groundbreaking acquisition. However, the FTC still retains the option to appeal the verdict until midnight on July 14. Assuming no further legal hurdles arise, the deal is poised to be finalized globally within a week, excluding the United Kingdom, which rejected the transaction in May.

Microsoft’s strategic motive for pursuing the acquisition of Activision centers around its goal of expanding into the mobile gaming market, where the tech giant currently has a limited foothold. In contrast, Activision holds ownership over highly popular games and their creators, encompassing titles like Candy Crush and Call of Duty. If successfully executed, this colossal deal would propel Microsoft to the third position among the world’s largest video game companies, trailing only China’s Tencent and its game console rival, Sony.

Although the deal has received approval from numerous jurisdictions, it has faced opposition from the FTC in the United States and the Competition and Markets Authority in the UK. Bobby Kotick, CEO of Activision Blizzard, previously expressed the company’s inclination to abandon the acquisition if the FTC secured a ruling to pause the deal.

Government entities opposing the merger argue that the proposed transaction would harm gamers and result in reduced competition in certain sectors. The FTC maintains that such a substantial merger would grant Microsoft exclusive access to Activision games, potentially sidelining competitors like Nintendo and Sony Group.

While Microsoft has already obtained antitrust approval from the European Union for its $69 billion bid, it faces resistance from Canada and the UK. In April, the British Competition and Markets Authority blocked the takeover, prompting Microsoft to plan an appeal later this month. The company’s request for an extension until October has been denied. Moreover, Canada’s Department of Justice recently concluded that Microsoft’s acquisition of Activision Blizzard “is likely to” result in reduced competition within certain segments of the gaming industry.

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