The $69 billion deal cleared an important hurdle.
(Photo: AP)
san francisco Microsoft has taken a step forward with its acquisition of video game giant Activision Blizzard. Judge Jacqueline Scott Corley in San Francisco on Tuesday denied the US government’s request to block the deal with an injunction.
The judge made it clear that her decision does not constitute a final “okay” for the takeover as a whole. “The court’s jurisdiction in this case is narrow,” Corley said. However, she accused the competition authority FTC of not having sufficiently argued in her application why the merger would restrict competition (judgment as PDF document).
The $69 billion acquisition would be one of the largest mergers in the gaming market. Microsoft is active in the business with its Xbox games console, among other things. Activision Blizzard is behind popular games like Call of Duty, Overwatch, and Candy Crush.
After the court’s decision was announced, Activision Blizzard’s stock rose more than 10 percent to around $92 a share, its highest value in two years. Microsoft had agreed to buy the game maker for $95 a share.
The FTC had argued that Microsoft could use the takeover to make Activision games available exclusively for its own platforms and thus limit competition. Commenting on Judge Corley’s decision, an FTC spokesman said, “We are disappointed with this outcome as this merger poses a clear threat to open competition in cloud gaming, subscription services and consoles.”
The EU Commission approved subject to conditions
The takeover is also controversial outside of the United States. Britain’s antitrust watchdogs vetoed it in April. However, the EU Commission’s competition watchdog approved the transaction subject to conditions.
Welcoming the San Francisco court’s decision, Microsoft President Brad Smith said, “We are grateful to the San Francisco court for this prompt and thorough decision, and we hope other jurisdictions will continue to work toward a timely resolution.”
Activision boss Bobby Kotick saw the court decision as a breakthrough: “We are optimistic that today’s ruling paves the way for full approval in other countries around the world.”
The two companies aim to complete the acquisition by July 18. Other court cases are pending. The FTC has, among other things, an opportunity to appeal against the judgment in San Francisco.
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