Breaking News: Microsoft Shatters Records with Staggering $75 Billion Deal! UK Regulator Gives Green Light to Epic Partnership with Activision!

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Microsoft has closed its $75 billion acquisition of Activision Blizzard following clearance from the UK regulator, ending 21 months of uncertainty over the games industry’s biggest-ever deal.

The US technology giant announced the completion of its transaction in a regulatory filing on Friday, before trading began on Wall Street, even as U.S. antitrust regulators vowed to press ahead with their legal fight against the deal.

The group said in documents released Friday that Bobby Kotick, Activision’s chief executive, will stay until the end of the year to help with the integration process.

Last Friday, the UK Competition and Markets Authority gave final approval to revised agreement this involves Microsoft licensing cloud streaming rights outside of the European Economic Area for Activision’s past and future catalogue, including titles such as call of Dutyto French game publisher Ubisoft.

“We are the only agency globally to have achieved this and this is a real benefit for UK players,” Sarah Cardell, chief executive of the CMA, said in an interview with the Financial Times. “We will not be influenced by any corporate lobby.”

Cardell added that Microsoft “gained nothing from this delay. It simply cost them time and money and they could have reached this resolution months ago.”

The U.S. Federal Trade Commission is still proceeding with an appeal of the deal in its home court that could seek to unwind the merger after it closes.

However, the CMA’s approval marks a victory for Brad Smith, the Microsoft executive who led the company’s legal campaign to defend a deal that many investors and analysts had written off earlier this year.

“We are grateful for the CMA’s thorough analysis and decision today,” Smith said in a statement late Friday. “We have now cleared the final regulatory hurdle to close this acquisition, which we believe will benefit players and the gaming industry around the world.”

The deal with Ubisoft forces Microsoft to give up control Activisionof ‘s successful franchises in the cloud gaming market and prevents them from becoming exclusive on its Xbox Cloud Gaming service, which the CMA said would strengthen the company’s dominance in a nascent market.

This concession makes the CMA the only global regulator to impose significant structural changes to the agreement. The long process, however, left many doubts about the British agency’s approach and triggered widespread dissemination criticism of Cardell from business leaders, intermediaries and legal advisors.

Cardell warned on Friday that “companies and their advisors should be in no doubt that the tactics employed by Microsoft are no way to engage with the CMA.”

The UK regulator’s initial ruling in February 2023 provisionally found that the deal hindered competition in the games console market, after Sony – of which PlayStation is the market leader – openly opposed the merger. But just a month later, after reviewing what it described as “new evidence”, the CMA reversed that position, to the surprise of many legal observers.

The CMA said in March that responses to the interim results showed Microsoft would have no financial incentive to make call of Duty exclusively for Xbox consoles, which according to analysts are outsold almost two to one by PlayStation.

However, Microsoft’s hopes that the agency’s breakthrough would pave the way for approval were quickly dashed. The CMA blocked the deal in April, citing concerns about the impact on cloud gaming. The companies appealed to the UK’s Competition Appeal Tribunal, hiring senior lawyers to defend their case.

The CMA’s position was at odds with that of the EU, which approved the deal in May following concessions from Microsoft to ensure that Activision titles would not be available exclusively on its cloud streaming service for 10 years.

July brought an average of turning point for companies. Microsoft defeated an attempt by the Federal Trade Commission to prevent its shutdown in a US court, frustrating the legal action led by agency president Lina Khan. Hours after the U.S. ruling, the CMA – now largely isolated among global regulators in opposing the deal – said it had agreed with the companies to defer the appeal while it considered a restructured transaction.

Within a few days, Sony had reached a truce with Microsoft, agreeing to a new licensing agreement to be maintained call of Duty on PlayStation following the merger.

Microsoft submitted a revised deal to the CMA in August, under which Activision’s cloud gaming rights will be sold to Ubisoft before the deal is completed. Ubisoft will then be able to offer those games on its own streaming service, while also licensing them to other cloud providers, including Microsoft. Commercial terms of the deal were not disclosed.

The CMA conceded provisional approval last month, holding a brief consultation before finalizing the deal on Friday.

“The CMA’s official approval is great news for our future with Microsoft and we look forward to joining the Xbox Team,” Activision said.

The European Commission on Friday ruled out a review of the merger because, it said, it did not constitute a new deal.

“Clearly we are aware of the global nature” of these deals, Cardell said in Friday’s interview with the FT. “Ultimately we will make the decisions we need to make for the UK.”

Additional reporting by Javier Espinoza

This article has been edited since first publication to clarify that the CMA granted provisional approval last month, not this month as originally stated