Tuesday marked a good day for Microsoft’s ongoing quest to acquire Activision Blizzard, with the FTC losing its out on its request for an injunction blocking the deal from going ahead before the August 2 trial.
Later that day, the U.K.’s CMA announced an agreement with Microsoft to pause litigation in the matter in an effort to iron out a compromise that would assuage the regulator’s concerns and allow it to reverse its decision to block the deal.
However, the U.K. market regulator has now said that a restructured deal could also prompt it to launch a new investigation.
Whilst merging parties don’t have the opportunity to put forward new remedies once a final report has been issued, they can choose to restructure a deal, which can lead to a new merger investigation. Microsoft and Activision have indicated that they are considering how the transaction might be modified, and the CMA is prepared to engage with them on this basis.
It appears as though both parties are trying to avoid a scenario in which Microsoft could potentially withdraw Xbox Cloud Gaming or even Xbox Game Pass itself from the U.K. market if the deal prevails elsewhere. However, the CMA seems resolute in its initial decision.
These discussions remain at an early stage and the nature and timing of next steps will be determined in due course. While both parties have requested a pause in Microsoft’s appeal to allow these discussions to take place, the CMA decision set out in its final report still stands.