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Microsoft's $69 Billion Activision Blizzard Deal Faces Antitrust Warning from EU, Resistance from Regulators

Greg Morcroft

Published: January 18, 2023 10:43 pm

Microsoft (US:MSFT) will likely receive an E.U. antitrust warning about its $69 billion bid for Activision Blizzard, which could pose another challenge to completing the previously announced deal.

Reuters reported on Monday evening that The European Commission is preparing to send a charge sheet, known as a statement of objections, outlining its concerns about the deal to Microsoft in the coming weeks. The E.U. antitrust watchdog has set an April 11 deadline for its decision on the deal. Microsoft stated that they continue working with the European Commission to address any marketplace concerns and that their goal is to bring more games to more people.

U.S. and U.K. regulators have also voiced concerns, with the U.S. Federal Trade Commission going to court to block the deal.

Microsoft faces resistance from regulators and competitors about the acquisition, the gaming industry’s biggest deal.

The U.S. Federal Trade Commission (FTC) plans to block the deal legally, while the U.K.’s Competition and Markets Authority has also expressed skepticism. Google and Nvidia have reportedly expressed concerns to the FTC about the potential of the merger to squash competition. Nvidia has stressed the need for open and equal access to Activision Blizzard’s games, while Google is reportedly concerned about Microsoft’s increased presence in the mobile gaming market.

Microsoft has attempted to address these concerns by highlighting its commitment to creating the best workplaces in the tech sector and its acceptance of unions in an ad in the Washington Post. The company has also walked back its claim that the FTC’s structure violates the United States Constitution.

Almost exactly a year ago, Microsoft unveiled plans to acquire Activision Blizzard for $95.00 per share in an all-cash transaction valued at $68.7 billion, including Activision Blizzard’s net cash. The acquisition will make Microsoft the world’s third-largest gaming company by revenue, behind Tencent and Sony.

The purchase includes iconic franchises from the Activision, Blizzard, and King studios, such as “Warcraft,” “Diablo,” “Overwatch,” “Call of Duty” and “Candy Crush,” in addition to global eSports activities through Major League Gaming. Activision Blizzard has studios around the world with nearly 10,000 employees.

The Fintel Retail Ownership shows the most popular securities held by Fintel users that have linked their broker accounts. This list is based on actual ownership records from broker accounts. Microsoft ranks ninth on the list.

The news arrives at a busy time for Microsoft, which, as Fintel reported last week, is in talks to invest another $10 billion in OpenAI, the parent of exploding new beta web offering called ChatGPT.

The deal, if struck, reportedly would give Microsoft the majority of OpenAI’s profits, 75%, until it recoups its investment. Once that happens, ownership would shift to a more standard 49% for Microsoft, 49% for other investors, and 2% for OpenAI’s nonprofit parent.

In October, The Information reported that Microsoft had been in talks to expand its previous $1 billion investment in OpenAI.

This article originally appeared on Fintel