Microsoft's $68.7 billion Activision acquisition clears key hurdle after UK regulator provisionally approves deal

• Microsoft and Activision Blizzard may finally be at the finish line.
• The CMA provisionally greenlit Microsoft's acquisition of the "Call of Duty" developer.

Microsoft's blockbuster acquisition of Activision Blizzard has provisionally been given the green light by the UK's antitrust body, clearing the path for the $68.7 billion deal, following strong opposition from regulators.

The UK's Competition and Markets Authority CMA said on Friday that remedies put forward by Microsoft for its proposed deal to buy the "Call of Duty" developer resolved key issues raised by the regulatory body in April when it moved to block the merger.

Last month, Microsoft and Activision submitted a revised version of the deal first announced in January 2022, as it sought to address central concerns that competition would be harmed, particularly in cloud gaming.

Part of the restructuring of the deal meant Microsoft would no longer purchase Activision's cloud gaming rights, which would instead be sold to Ubisoft, the developer behind the "Assassin's Creed" series.

That means Microsoft would no longer have the option to exclusively offer Activision's roster of games on the Microsoft-owned Xbox Cloud Gaming service.

"The CMA considers that the restructured deal makes important changes that substantially address the concerns it set out in relation to the original transaction earlier this year," the regulator said in a release announcing its decision.

"In particular, the sale of Activision's cloud streaming rights to Ubisoft will prevent this important content — including games such as 'Call of Duty,' 'Overwatch,' and 'World of Warcraft' — from coming under the control of Microsoft in relation to cloud gaming."

Sarah Cardell, CEO of the CMA, said that although Microsoft had now made sufficient amends to the proposed deal, "it would have been far better, though, if Microsoft had put forward this restructure" during the regulator's "original investigation."

"This case illustrates the costs, uncertainty, and delay that parties can incur if a credible and effective remedy option exists but is not put on the table at the right time," she said.

The CMA will conduct a consultation until October 6, before the acquisition agreement expires on October 18.

Brad Smith, Microsoft vice president and chair, said in a statement issued to Insider, "We are encouraged by this positive development" as "we presented solutions that we believe full address the CMA's remaining concerns related to cloud game streaming."

Activision said in a statement issued to Insider, "The CMA's preliminary approval is great news for our future with Microsoft."

"We're pleased the CMA has responded positively to the solutions Microsoft has proposed, and we look forward to working with Microsoft toward completing the regulatory review process," it added.