Microsoft’s $68.7 billion Activision Blizzard deal to be reviewed by US FTC: report

The US antitrust review of the $68.7 billion (roughly Rs. 5,10,990 crore) proposed by Microsoft for the acquisition of Call of Duty maker Activision Blizzard Inc will be handled by the Federal Trade Commission (FTC), reported Bloomberg News Monday evening, citing a person familiar with the matter.

The FTC, instead of the Justice Department, will investigate whether the takeover will harm competition, according to the report.

In a bid to toughen merger guidelines, the FTC and the Justice Department jointly said last month that industries have become increasingly concentrated and an increase in merger filings in 2020 and 2021 indicated that the situation was going to get worse.

Days later, the FTC voted unanimously to sue arms maker Lockheed Martin’s proposed $4.4 billion (about Rs 32,890 crore) purchase of rocket engine maker Aerojet. Rocketdyne Holdings for antitrust reasons.

Microsoft, Activision and FTC did not immediately respond to requests for comment from Reuters.

The deal announced by Microsoft in January is the largest ever and is expected to be the largest all-cash acquisition on record. It will bolster Microsoft’s firepower in the booming video game market where it takes on leaders Tencent and Sony.

Meanwhile, Sony announced on Monday that it will acquire Bungie, the original creator of the Halo video game and developer of Destiny, in a deal valued at $3.6 billion (about Rs. 26,910 crore), the latest in a wave of consolidations sweeping the gaming industry.

Microsoft has so far avoided the kind of scrutiny facing Alphabet and Meta Platforms, but the deal, which would make it the world’s third-largest games company, will put the Xbox maker on lawmakers’ radars, it said. Andre Barlow of the law firm Doyle, Barlow & Mazard, after the deal was announced.

Reuters previously reported that Microsoft would pay a $3 billion (about Rs. 22,420 crore) severance fee if the deal fell through, according to a source familiar with the matter, suggesting the company was confident to seek antitrust approval .

Microsoft and Activision gave themselves until June 2023 to finalize the transaction.

© Thomson Reuters 2022

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