The UK's Competition and Markets Authority (CMA) has granted preliminary approval for Microsoft's (MSFT:US) proposed acquisition of Activision Blizzard (ATVI:US) for $69 billion. Initially, the CMA had raised objections based on concerns related to cloud gaming. However, Microsoft has since adjusted the terms of the deal, transferring cloud gaming rights for both existing and forthcoming Activision Blizzard games to Ubisoft.
In its official statement, the CMA acknowledged that the revised agreement addresses many of the apprehensions initially expressed about the transaction earlier this year. They view these alterations as significant steps towards potential clearance of the deal. It is important to note that this approval is preliminary, with the final decision pending.
The CMA has initiated a consultation process, seeking input from third parties regarding Microsoft's proposed remedies. This consultation period will continue until October 6th, and the CMA intends to reach a final decision before the extended deadline of October 18th.
Microsoft and Activision Blizzard have both responded positively to the CMA's decision.
“We presented solutions that we believe fully address the CMA’s remaining concerns related to cloud game streaming, and we will continue to work toward earning approval to close prior to the October 18 deadline." Microsoft's Vice Chair and President Brad Smith stated.
“This is a significant milestone for the merger and a testament to our solutions-oriented work with regulators,” said Activision Blizzard CEO Bobby Kotick in a statement sent to employees.
The final outcome of this acquisition remains contingent on the CMA's evaluation of the proposed remedies and its subsequent decision-making process.
On the political trading front, several congress members were seen buying shares of MSFT this year, including Ro Khanna, Michael Guest, Josh Gottheimer, Kathy Manning & Daniel S. Goldman. Most notably, former House speaker Nancy Pelosi's spouse exercised 50 MSFT call options (5,000 shares) at a strike price of $180 on June 15.
The MSFT stock trades above 33% YTD, whereas ATVI shares trade more than 20% in green YTD.