Microsoft’s Activision Buyout Gets Positive Nod from UK Regulator

The British government is expected to resolve its last few issues with the deal by Oct. 6

Signage is seen at The Ultimate Fan Experience, Call Of Duty XP 2016, presented by Activision, at The Forum on September 3, 2016 in Inglewood, California. (Photo by Rich Polk/Getty Images for Activision)

Microsoft is another step closer to completing its $69 billion acquisition of video game maker Activision Blizzard after a British regulator said the company has satisfied its concerns over the deal.

Britain’s Competition and Markets Authority said Friday that it considers the changes made to the original buyout agreement “substantially address the concerns” over the deal as it was struck last year, which it tried to block.

The biggest sticking point was Activision’s cloud streaming rights. The British government was concerned about allowing a company to own both the a top-selling console and being the publisher of popular games, which could limit the growth of cloud gaming technology. As part of the negotiations, the Redmond, Washington-based tech giant agreed to pass on those rights.

“In contrast to the original deal, Microsoft will no longer control cloud gaming rights for Activision’s content, so would not be in a position to limit access to Activision’s key content to its own cloud gaming service or to withhold those games from rivals,” the agency said in a statement.

The rights will instead be sold to French video game publisher Ubisoft, which the CMA noted “will be free to offer Activision’s games both directly to consumers and to all cloud gaming service providers however it chooses.”

“The deal with Ubisoft also requires Microsoft to port Activision games to operating systems other than Windows and support game emulators when requested, addressing the other main shortcoming with the previous remedies package,” the agency said.

The CMA is the last remaining agency whose sign off is needed before Microsoft could go ahead with the acquisition. The regulator said it is now holding a “consultation” over a small number of remaining issues it has with the deal, and will meet with Microsoft to resolve those matters through Oct. 6 before making its final decision on whether to approve the deal.

The European Union gave its OK to the buyout in May. In July, the Federal Trade Commission’s efforts to block the deal were turned down by a judge.

The companies have until Oct. 18 to close the deal.

“This is a significant milestone for the merger and a testament to our solutions-oriented work with regulators,” Activision CEO Bobby Kotick said in a blog post directed to employees Friday. “I remain optimistic as we continue the journey toward completion.”

“We are encouraged by this positive development in the CMA’s review process,” Brad Smith, Microsoft’s president, said in an emailed statement. “We presented solutions that we believe fully address the CMA’s remaining concerns related to cloud game streaming, and we will continue to work toward earning approval to close prior to the Oct. 18 deadline.”