Recap: After Microsoft's victory over the FTC in its $69 billion attempt to purchase Activision Blizzard, the CMA is the last remaining regulator opposing the merger, and the organization seemingly recognizes the precarious position of its case. The historic deal now seems more likely to close than ever.
The UK's Competition and Markets Authority (CMA) has agreed to pause its litigation against Microsoft's attempt to acquire Activision Blizzard so the two can discuss new proposals regarding the purchase. The negotiations are the final obstacle between Microsoft and ownership of the Call of Duty and Candy Crush publisher.
The CMA was the first government regulator to block the deal, with the US Federal Trade Commission (FTC) following soon after. However, Microsoft's victory over the latter in federal court this week leaves the UK regulator as the sole opposition. Authorities in the EU, Brazil, and other international markets have unconditionally approved the merger.
Sony – Microsoft's primary competitor in the game console space – repeatedly raised concerns that Activision's Call of Duty franchise is too important to fall under one console manufacturer's control. That subject became the center of the FTC hearing, but the judge ruled that the Redmond giant had sufficiently proved it wouldn't restrict access to Call of Duty on non-Xbox consoles.
Despite all the attention surrounding the leading first-person shooter property, the CMA's disapproval of the acquisition hinges on whether Activision Blizzard's properties will give Xbox Cloud Gaming an anticompetitive degree of dominance in the emerging cloud gaming sector. The regulator previously said Microsoft's commitments to share its content with competing streaming platforms were insufficient as remedies, but the two have returned to the negotiating table since the US ruling, making a joint submission to the Competition Appeal Tribunal.
Furthermore, CNBC's David Faber reports that Microsoft plans to make a small, "discrete" divestiture to assuage the CMA's reservations. It's unclear what precisely Microsoft is willing to give up to win the UK legal battle, but any deal will likely be related to its streaming business.
Due to the acquisition contract's July 18 deadline, the engaged parties will likely try to wrap up the proceedings ASAP. Following Redmon's triumph over the FTC, Activision Blizzard's stock price has jumped, bringing it close to the $95 per share the two companies agreed upon for the deal.