UK’s CMA Reconsiders Microsoft-Activision Deal, Prepares for New Probe

In a surprising turn of events, the U.K.’s Competition and Markets Authority (CMA) has announced it is willing to re-evaluate the proposed deal between Microsoft and Activision Blizzard, Reuters is reporting.

Back in April, the CMA became the first regulatory body to block the $69 billion deal. However, the situation took a different turn on Tuesday when a U.S. court ruling cleared the path for the deal to proceed.

The CMA stated that while merging parties typically cannot introduce new remedies after a final report is issued, they have the option to restructure the deal, which may trigger a new merger investigation.

It was revealed that both Microsoft and Activision are considering modifying the transaction, and the CMA is prepared to engage in discussions based on this premise.

The discussions are still in their early stages, and the timeline for the next steps will be determined in due course, according to the CMA.

This unexpected decision by the CMA, particularly at a stage when an appeal seemed imminent, has surprised deal advisers and many competition lawyers.

It is being described as an unprecedented and dramatic turn of events by Alex Haffner, a competition partner at the UK law firm Fladgate.

A source close to the deal expressed surprise at the CMA’s decision, suggesting that the UK regulator might not want to stand alone when compared to the influential European Union and the United States.

Moving forward, Microsoft and Activision will need to tread carefully, presenting a proposal that satisfies the British regulator while remaining aligned with remedies already accepted by the European Union.