Microsoft’s proposed $75 billion acquisition of video game giant Activision Blizzard has hit a snag, as the deal has been rejected by the United Kingdom’s Competition and Markets Authority (CMA).
The CMA announced on Monday that it had concerns about the potential impact of the deal on competition within the gaming industry. Activision Blizzard is the publisher of some of the world’s most popular video game franchises, including Call of Duty, World of Warcraft, and Candy Crush, and Microsoft’s acquisition of the company would give it significant control over the market.
In a statement, the CMA said, “We are concerned that the acquisition could lead to a substantial lessening of competition in the supply of certain types of video games, which could ultimately result in higher prices and less innovation for players.”
The CMA has now launched a formal investigation into the proposed acquisition, which could take up to six months to complete. During this time, Microsoft and Activision Blizzard will be required to provide information and evidence to the authority to address its concerns.
The rejection of the deal by the CMA is a setback for Microsoft, which has been looking to expand its presence in the gaming industry. The tech giant already owns Xbox Game Studios, which develops and publishes its own video game titles, but the acquisition of Activision Blizzard would have given it access to a much larger portfolio of games and franchises.
Microsoft’s proposed acquisition of Activision Blizzard was announced in January and was expected to close by the end of 2023. The deal would have been one of the largest ever in the gaming industry and would have solidified Microsoft’s position as one of the leading players in the space.
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Following the news of the CMA’s rejection, Microsoft issued a statement saying that it was “disappointed” with the decision but remained committed to working with the authority to address its concerns. Activision Blizzard has not yet commented on the matter.
The rejection of the deal by the U.K. does not necessarily mean that the acquisition will not go through. Microsoft could still seek approval from other regulatory bodies or make changes to the deal to address the CMA’s concerns. However, the rejection does create uncertainty and could potentially lead to delays or changes in the terms of the deal.