UBI UBISoft Entertainment

By Elena Vardon

Microsoft's proposals to modify its $75 billion Activision acquisition address the concerns of the U.K. antitrust authority, the regulator said in a provisional decision--opening the door to the deal being eventually cleared.

The U.K. Competition and Markets Authority said that the new deal submitted by Microsoft should lessen any harm to competition in cloud gaming. The CMA had rejected the deal initially, providing one of the biggest obstacles to the combination.

The CMA said Friday that Microsoft's proposed restructuring of the transaction--in which Activision would sell its cloud gaming rights to Ubisoft--makes it possible for the deal to be cleared.

"This is a new and substantially different deal, which keeps the cloud distribution of these important games in the hands of a strong independent supplier, Ubisoft, rather than under the control of Microsoft," the CMA said.

In response, both Activision and Microsoft said they were encouraged by the development.

"The CMA's preliminary approval is great news for our future with Microsoft," Activision said.

Microsoft said it would continue to work to earn approval. An extended deadline for Microsoft's merger agreement with Activision is due to expire on Oct. 18.

The CMA still has residual concerns for which Microsoft has put forward remedies. It is consulting on them before making a final decision, it said. The consultation on the remedies will last until Oct. 6, it added.

Microsoft announced its plan to buy Activision in January 2022, and valued the deal at $69 billion after adjusting for the videogame publisher's net cash.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

September 22, 2023 03:56 ET (07:56 GMT)

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