Dear clients,
The UK will block Microsoft’s $69 billion acquisition of Call of Duty maker Activision Blizzard over fears it will stifle competition in cloud gaming, dealing a surprise blow to the biggest deal in the gaming world.
The country’s antitrust regulator said on Wednesday that Microsoft’s commitment to provide access to Activision’s multibillion-dollar „Call of Duty“ franchise to leading cloud gaming platforms would not resolve its concerns.
Microsoft president Brad Smith said the company remains fully committed to the acquisition and is appealing the decision, while Activision says it will „aggressively work“ with Microsoft to reverse it.
Activision CEO Bobby Kotick told staff this wasn’t „the news we wanted, but it’s far from the last word on this deal.“
Shares in Activision, which also makes Candy Crush, Overwatch and World of Warcraft, fell almost 12% to $76.65, off Microsoft’s $95 per share offer price. The publisher will lose nearly $8 billion in value if losses persist.
The game company also reported quarterly results on Wednesday, a day ahead of schedule, beating estimates for quarterly orders, however, that did little to allay investors‘ concerns about the Britain decision.
Analysts expect Microsoft to continue the fight, but if it does raise the white flag, it will free up more than $60 billion in cash flow to either return to investors or invest in AI-related offerings.
Europe will make a decision on the Activision deal by May 22. The US Federal Trade Commission already intends to block it.
