MSFT - Microsoft-Activision deal takes a big step towards completion

2023-07-11 12:23:34 ET

Activision Blizzard Inc ( NASDAQ: ATVI ) gained more than 5.0% this morning after its $69 billion deal with Microsoft Corp ( NASDAQ: MSFT ) took a big step towards completion.

U.S. federal judge rejects FTC’s motion

On Tuesday, a U.S. federal judge rejected the FTC’s motion for an emergency injunction to block Microsoft from taking over Activision Blizzard.

The acquisition is not entirely out of the woods, though, since the Federal Trade Commission can appeal the ruling in a federal appellate court. Still, Bobby Kotick – the Chief Executive of Activision Blizzard said today in a memo to employees:

We’re optimistic that today’s ruling signals a path to full regulatory approval around the globe. We stand ready to work with U.K. to address remaining concerns so our merger can quickly close.

In April, the Competition and Markets Authority blocked the Microsoft-Activision deal citing a threat to competition ( read more ).

Microsoft’s response to anti-competition concerns

During five days of hearing, Microsoft Corp reiterated that it intends to make Activision games available to a wider audience.

To that end, it signed multi-year agreements with Nintendo, Nvidia, and Steam. It even proposed a 10-year deal to keep Call of Duty on PlayStation as well. Hailing today’s decision, Brad Smith – the President and Vice Chair of Microsoft said:

We’re grateful for this quick and thorough decision and hope other jurisdictions will continue working towards a timely resolution. We’re committed to working to address regulatory concerns.

The judgement arrives only weeks before both MSFT and Activision Blizzard are scheduled to report their quarterly results.

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