Microsoft's new UK Activision Blizzard CMA merger application includes cloud streaming divestiture

Microsoft may finally get to close this ATVI deal, following a new merger application with the CMA in the United Kingdom.


Microsoft and Activision Blizzard are very close to closing the deal nearly 18 months since it was announced. Bobby Kotick, Activision Blizzard CEO, announced that Microsoft has filed a new merger application with the Competition and Markets Authority (CMA) in the United Kingdom. The key difference is a promised divestiture from cloud streaming in the country.

Microsoft Vice Chair & President Brad Smith made a statement announcing the cloud streaming deal with Ubisoft on Microsoft's blog:

To address the concerns about the impact of the proposed acquisition on cloud game streaming raised by the UK Competition and Markets Authority, we are restructuring the transaction to acquire a narrower set of rights. This includes executing an agreement effective at the closing of our merger that transfers the cloud streaming rights for all current and new Activision Blizzard PC and console games released over the next 15 years to Ubisoft Entertainment SA, a leading global game publisher. The rights will be in perpetuity.

As a result of the agreement with Ubisoft, Microsoft believes its proposed acquisition of Activision Blizzard presents a substantially different transaction under UK law than the transaction Microsoft submitted for the CMA’s consideration in 2022. As such, Microsoft today has notified the restructured transaction to the CMA and anticipates that the CMA review processes can be completed before the 90-day extension in its acquisition agreement with Activision Blizzard expires on October 18.

Here's an email sent from Activision Blizzard CEO Bobby Kotick to his employees that was then reposted as a public statement:

Activision Blizzard CEO Bobby Kotick sent the following email to employees:


I want to share an update on our merger with Microsoft.

To address the UK CMA’s concerns regarding cloud streaming, Microsoft announced it filed a new merger application in the UK that includes a divestiture for cloud streaming rights at closing with respect to current and new PC and console games. We welcome Microsoft's decision to enter into this agreement and submit a new application to the CMA, which Microsoft believes will address the CMA’s concerns. 

For us, nothing substantially changes with the addition of this divestiture: our merger agreement with Microsoft, closing deadline, and the cash consideration to be paid for each Activision Blizzard share at closing remain the same. We will continue to work closely with Microsoft and the CMA throughout the remaining review process, and we are committed to help Microsoft clear any final hurdles as quickly as possible. 

On that note, our integration management team is hard at work to ensure we are prepared for a smooth close. It’s a major, cross-functional, collaborative effort, and I am thankful for all the work that’s being done. 

This has been a longer journey than expected, and I am very proud of how focused everyone has remained on delivering great games. Thanks for your continued dedication and commitment to our players. 

More to come.


Shareholders of Microsoft and Activision Blizzard will be happy to hear that Kotick believes that the deal will proceed before its closing deadline. Microsoft (MSFT) currently is valued at nearly $2.4 trillion, so they have plenty of equity and cash to close the $70 billion merger agreement. 

The Activision Blizzard monthly time period stock chart from 2021 to present day.
Long-term Activision shareholders ultimately will end up exiting for less than the all-time high share price of $104.53/share reached in 2021 before the Cosby Suite revelations.

Keep it locked on Shacknews for the latest market news. Nvidia is set to report earnings results later this week.


Asif Khan is the CEO, EIC, and majority shareholder of Shacknews. He began his career in video game journalism as a freelancer in 2001 for Asif is a CPA and was formerly an investment adviser representative. After much success in his own personal investments, he retired from his day job in financial services and is currently focused on new private investments. His favorite PC game of all time is Duke Nukem 3D, and he is an unapologetic fan of most things Nintendo. Asif first frequented the Shack when it was sCary's Shugashack to find all things Quake. When he is not immersed in investments or gaming he is a purveyor of fine electronic music. Asif also has an irrational love of Cleveland sports.

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