Activision Share Price Trades at Multi-Month Highs on UK Approval

The Activision Blizzard Inc (NASDAQ: ATVI) share price traded at highs last seen in July 2021 after the UK’s Competition and Markets Authority (CMA) finally approved Microsoft’s $69 billion acquisition of the company, which was first announced in January 2022.

Microsoft agreed to its streaming rights to Ubisoft Entertainment, which was a critical condition for the UK CMA’s approval. The restructured deal addressed the CMA’s concern that Microsoft would lock up competition in cloud gaming as the nascent market takes off. 

The CMA also noted that it was the only regulator globally that stuck to its guns and forced Microsoft to significantly alter the takeover deal to address the regulator's concerns. The CMA said it would not be “swayed by corporate lobbying”, and its decision was “free from political influence.”

Microsoft made a concession allowing Ubisoft to buy Activision’s cloud gaming rights in August this year. The concession placed the cloud streaming rights (outside the EEA) for Activision’s entire PC and console content generated over the next 15 years in Ubisoft’s hands. Ubisoft is an independent competitor with plans to offer new cloud content access methods. 

Ubisoft's acquisition of Activision's cloud streaming rights is set to safeguard the availability of essential and beloved content, including iconic games such as Call of Duty, Overwatch, and World of Warcraft, from falling under Microsoft's dominance within cloud gaming.

The revised agreement has effectively resolved the concerns the Competition and Markets Authority (CMA) raised during their initial investigation, which concluded earlier this year.

While the CMA did pinpoint a few remaining issues with the updated deal, Microsoft has pledged to provide assurances that will guarantee the enforceability of the terms of the transfer of Activision's rights to Ubisoft by the CMA.

Sarah Cardell, Chief Executive of the CMA, said: “The CMA is resolute in its determination to prevent mergers that harm competition and deliver bad outcomes for consumers and businesses… We delivered a clear message to Microsoft that the deal would be blocked unless they comprehensively addressed our concerns and stuck to our guns on that. With the sale of Activision’s cloud streaming rights to Ubisoft, we’ve made sure Microsoft can’t have a stranglehold over this important and rapidly developing market.”

Activision Blizzard (ATVI) stock price. 

The Activision Blizzard weekly share price chart shows it is trading at heights last seen in July 2021.