The Activision Blizzard Inc (NASDAQ: ATVI) stock price has risen 8.47% in the past week after a Federal judge denied an application by the Federal Trade Commission (FTC) to grant an injunction blocking the deal with Microsoft from being consummated.
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However, while the Federal ruling was a significant milestone for Microsoft in its efforts to acquire Activision Blizzard in a deal worth $69 billion, the two companies still have to convince the UK Competition and Markets Authority (CMA) to accept the deal.
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Luckily for Microsoft, the CMA recently said it is open to the two firms offering concessions to make the deal more palatable to the regulator. The comments come after the CMA blocked the acquisition citing antitrust concerns.
If the deal is successful, Microsoft will become the third-largest video game publisher in the world, with control over popular franchises such as “Call of Duty,” “World of Warcraft” and “Diablo.” Several factors could hinder the deal’s impending finalisation.
First, the UK’s CMA has said it could reopen its antitrust investigation into the deal afresh, where it will re-examine the deal in its entirety instead of just considering the amendments being made to the deal by the two companies.
Furthermore, the FTC could appeal the decision by District Judge at the US Court of Appeals for the Ninth Circuit for a stay of the order pending an appeal.
District Judge, Jacqueline Scott Corley, wrote: “The US government “has not shown it is likely to succeed on its assertion the combined firm will probably pull Call of Duty from Sony PlayStation or that its ownership of Activision content will substantially lessen competition in the video game library subscription and cloud gaming markets.”
The CMA issued a statement: “Microsoft and Activision have indicated that they are considering how the transaction might be modified, and the CMA is prepared to engage with them on this basis.”
The Activision Blizzard CEO, Bobby Kotick, said: “Our merger will benefit consumers and workers. It will enable competition rather than allow entrenched market leaders to continue to dominate our rapidly growing industry.”
*This is not investment advice.
Activision Blizzard (ATVI) stock price.
The Activision Blizzard (ATVI) stock price rallied 8.47% in the past week. What’s next?
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