Microsoft Wins Again
Through months of intense litigation, it seems now the path is far clearer for Microsoft to purchase video game publisher Activision. Announced in January of last year, mega-cap tech company Microsoft announced its successful bid for Activision and its properties, exponentially expanding its presence in the video game industry. Since then, the Federal Trade Commission sued Microsoft for the acquisition, claiming that it would severely threaten the competitive sphere within the sector. After approvals abroad, Microsoft’s biggest challenge to finalize the bid was left in the United States. On Tuesday, a federal judge in San Francisco struck down the FTC’s plea, ruling in favor of Microsoft’s nearly $70 billion purchase.
The news of the approval sent Activision Blizzard’s stock up over 10% at the bell, with most anticipating the deal to become official by July 18. However, there is a chance the FTC pushes further to block the attempt, taking the decision higher up the legal ladder to the U.S. Court of Appeals for the 9th Circuit. Furthermore, the United Kingdom made headlines earlier this year, with the Competition and Markets Authority skeptical and currently in negotiations with the two companies. One of the main arguments from the FTC is Microsoft currently owns Xbox, one of the most popular video gaming consoles. If Microsoft was given full ownership of Activision Blizzard, they would have the opportunity to make several of the most popular games exclusive for Xbox users only. Regardless, the FTC has announced it is planning their next steps to fight the deal as they continue their broader fight against Big Tech.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.