Microsoft and Activision Blizzard Finally Close History’s Largest Tech Deal

Activision CEO Bobby Kotick will stay on in his role through the end of 2023, he wrote in an email to employees that was shared by the firm.

“We now join one of the most successful global companies, poised for unprecedented opportunities to connect the world through our games,” Kotick wrote.

The deal closed after the U.K.’s Competition and Markets Authority, or CMA, said Friday that its concerns over the threat to competition posed by the deal were resolved by
Microsoft’s
(ticker: MSFT) transfer of cloud-streaming rights for
Activision’s
(ATVI) videogames to a rival company.

The acquisition was completed despite continuing opposition from the U.S. Federal Trade Commission. The FTC said last month that it plans to restart an in-house trial against
Microsoft
over the acquisition, but it doesn’t currently have the power to block the deal. Federal judges rejected its attempts to obtain a court order to do so.

Microsoft President Brad Smith said on the social-media network X. formerly Twitter, that the company had crossed the “final hurdle” to closing the acquisition. Microsoft and Activision had set an extended deadline of Oct. 18 for completing the merger.

The deal’s closing may inspire more M&A among large tech companies, assuming they are willing to battle with regulators around the globe. The UK approval came with a warning for Microsoft and its Big Tech peers. 

“Businesses and their advisors should be in no doubt that the tactics employed by Microsoft are no way to engage with the CMA. Microsoft had the chance to restructure during our initial investigation but instead continued to insist on a package of measures that we told them simply wouldn’t work,” said Sarah Cardell, chief executive of the CMA, in a statement.

That rebuke makes it look as if the British regulator is just getting started taking on big technology companies. The CMA is claiming a win, despite having backed down from its initial stance against the deal, which led to Microsoft suggesting it would discourage innovation and investment in the U.K. However Microsoft ended up backing down too.

This deal could be a sign of things to come. The CMA clearly has no problem being the only holdout against megadeals, having previously deferred to European Union regulators on merger controls.

“The question that is left hanging… is whether this case shows a merger oversight system in the U.K. that is too dogmatic in dealing with what is a forward looking competitive assessment (especially in the case of ‘Big Tech’), or one which can be sufficiently flexible when required,” said Alex Haffner, competition partner at the U.K. law firm Fladgate. 

Microsoft and
Amazon.com’s
(AMZN) dominance of the cloud-computing market is currently under investigation in the U.K. 

Write to Adam Clark at [email protected]