The UK regulator’s Microsoft-Activision Blizzard red light will be hard to reverse

MLex Market Insight

News

4.9 • 9 Ratings

🗓️ 5 May 2023

⏱️ 15 minutes

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Summary

Microsoft has lashed out at the UK’s Competition and Markets Authority over its decision to veto the software giant’s $69 billion acquisition of gaming company Activision Blizzard. Microsoft President Brad Smith called the decision “the darkest day of our four decades in Britain,” warning that the regulator’s red light had shaken the company’s confidence about doing business in the UK. On this week’s podcast, MLex’s M&A team examines the fallout of the CMA’s decision and what it means for the prospects of the global deal.

Transcript

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0:00.0	Microsoft has been in the United Kingdom for 40 years.
0:14.5	But this decision, I have to say, is probably the darkest day in our four decades in Britain.
0:20.3	It does more to shake our confidence in the future of the opportunity to grow a technology
0:27.4	business in Britain than we've ever confronted before.
0:31.5	And that was the voice of Microsoft President Brad Smith speaking to the BBC.
0:35.8	His anger was palpable, as you just heard, following the decision
0:39.4	by the UK's Competition and Markets Authority to veto Microsoft's 69 billion US dollar acquisition
0:46.1	of gaming company Activision Blizzard. Welcome to Emlex's weekly podcast, James Panicki with you,
0:52.2	and the red light from the CMA is significant news
0:55.7	because it has also exposed the fissures between the EU and the UK's regulatory environments.
1:02.0	And Microsoft isn't holding back about its frustration.
1:05.5	The clear message to the UK government is that the country's antitrust regulator is undermining the post-Brexit promise of
1:12.9	Singapore on the Thames. Of course, there's still more to play out. The deal has been reviewed in
1:18.4	jurisdictions around the world, including the European Union, yet this clearly is an important
1:23.9	setback for Microsoft. To discuss the case, I've assembled as many MLEX
1:28.5	M&A reporters as I could get together at the same time. Andrew Boyce is our EU mergers reporter.
1:34.6	Nicholas Hurst is our chief correspondent covering mergers in the EU, and Flavia Fortes
1:39.7	is our global head of mergers. They're joining me from Brussels, London and Rome, respectively.
1:46.1	It's great to have your company, Andrew in Brussels, starting from you. Maybe tell us something
1:51.7	about what prompted the CMA to reach a decision that is clearly proving to be so contentious.
1:58.9	Yeah, so last week it blocked the deal,
2:01.4	say it threatened to alter the future of the cloud gaming market,
	...

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