Watchdog to probe £50billion Activision takeover
THE £50bn mega-deal between Microsoft and Call of Duty video game maker Activision Blizzard is to be probed by a watchdog.
The Competition and Markets Authority (CMA) is considering whether the tie-up, announced in January, would result in a ‘substantial lessening of competition’ and result in worse outcomes for consumers.
The regulator has invited comments from any parties interested in the transaction and has set a deadline of September 1 to decide whether or not to launch an in-depth investigation.
Shares in Activision dropped 0.2pc on Wall Street following news of the probe while Microsoft shares rose 0.6pc.
The acquisition of Californiabased Activision is the biggesttakeover in the video game world and will make Microsoft the third-largest computer games firm behind Sony of Japan and China’s Tencent.
The deal makes Activision nearly eight times more valuable than Rolls-Royce and worth almost as much as mining giant Glencore. Last year, the company made a profit of £2.3bn.
However, there are concerns among regulators on both sides of the Atlantic that such a deal could harm Microsoft’s rivals by limiting access to some of Activision’s biggest games, which include the Call of Duty franchise (pictured), to its own line of Xbox video game consoles which compete with Sony’s PlayStation.
Last month, the chair of the Federal Trade Commission (FTC) Lina Khan told US lawmakers that the agency was examining the deal, which is expected to complete next year. The FTC has also been encouraged to examine how the tie-up will affect Activision’s workers as it reels from a sexual harassment scandal from last year.
Activision chief Bobby Kotick stands to make more than £276m from the sale through his stake, but has been under fire for the initial handling of the crisis, admitting the response to the allegations was ‘tone deaf’.
Activision merged with Blizzard in 2008. The purchase forms part of a major effort by Microsoft to expand its position in the video game market.