Microsoft’s appeal against the British government’s rejection of its $69 billion takeover bid for Activision Blizzard has been put on hold by a London tribunal. The pause is intended to allow the parties involved more time to reach a resolution. Microsoft, Activision, and the Competition and Markets Authority (CMA) had all requested the two-month stay after the CMA expressed interest in considering a modified deal proposed by Microsoft. The Competition Appeal Tribunal (CAT) ruled that the full hearing of Microsoft’s appeal, originally scheduled to begin on July 28, should be adjourned.
Judge Marcus Smith indicated his willingness to adjourn the upcoming hearing if the CMA provided a clear explanation for the change in circumstances or a valid reason justifying the adjournment. The judge also requested the CMA to outline any new consultation processes that would be implemented. In April, the CMA became the first major regulatory body to block the acquisition of Activision Blizzard, citing concerns about the potential impact on competition in cloud gaming.
The US Federal Trade Commission (FTC) has also opposed the merger, but suffered a significant setback last week when a federal court denied the FTC’s request to temporarily halt the deal. In the UK, the CMA’s final report typically represents the end of the line, as companies are not allowed to propose remedies after its publication. Their only recourse is to appeal to the CAT. However, last week, shortly after a US federal court cleared the deal, the CMA announced that it would reconsider a modified proposal, thus potentially satisfying its concerns through a new investigation.
All parties involved in the case applied for a two-month pause at the CAT, with the CMA’s lawyers stating that it would enable swift and constructive engagement between the CMA and the parties regarding Microsoft’s proposals. David Bailey, a lawyer representing the CMA, informed the tribunal that the FTC’s initial defeat did not influence the CMA’s decision to consider a new deal. He further stated that both Microsoft and the CMA were confident that a restructured transaction, once notified by Microsoft, could address the concerns raised by the CMA.
Microsoft’s lawyer, Daniel Beard, stressed the urgency of closing the deal and stated that the UK was the only obstacle remaining. The parties involved are now granted additional time to engage in discussions and potentially reach a resolution that satisfies all parties.
In summary, Microsoft’s appeal against the British government’s rejection of its takeover bid for Activision Blizzard has been temporarily paused by a London tribunal. The pause allows for further negotiations and discussions to take place in order to resolve the dispute. The CMA’s initial concerns about the impact on competition in cloud gaming prompted the blockage of the acquisition. However, the CMA has expressed willingness to reconsider a modified proposal. Both Microsoft and the CMA believe that a restructured transaction can address the concerns raised. The pause in the case provides an opportunity for all parties to engage in constructive dialogue and reach a resolution.
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