UK regulator approves Microsoft's $68.7 billion purchase of Activision Blizzard

UK's antitrust regulator has given Microsoft the green light to buy Activision Blizzard for $68.7 billion following a protracted back and forth. The regulator called Microsoft's concession to sell cloud gaming rights to Ubisoft a "gamechanger that will promote competition."

With the last major obstacle out of the way, the Competitions and Markets Authority (CMA) has now largely cleared the path for the companies to close the biggest merger in gaming history. That move was widely expected after the watchdog said in September that the company's revised merger agreement "substantially addresses previous concerns and opens the door to the deal being cleared."

In April, the CMA blocked the deal on the grounds of a belief that it would make Microsoft too dominant of a player in the cloud gaming space. However, as other dominoes that were preventing the deal from happening fell, the CMA gave Microsoft a second chance to resolve its concerns. The companies extended their merger agreement by three months to give them time to smooth things out with the CMA.

Microsoft later submitted a modified deal to the watchdog that will see it sell Activision Blizzard game streaming rights to Ubisoft if the merger goes through. Ubisoft would then handle cloud streaming rights in perpetuity for current titles and any others that Activision Blizzard releases over the following 15 years. Given that the CMA's misgivings over the original deal, Microsoft evidently hoped that the concession would be significant enough to resolve the regulator's concerns. Evidently, that's exactly what happened.

The CMA said last month that it had "residual concerns" about enforcement of Microsoft's revised proposal. However, it noted that "Microsoft gave undertakings that will ensure that the terms of the sale of Activision's rights to Ubisoft are enforceable by the CMA."

The regulator touted its role in forcing Microsoft to make concessions. "With the sale of Activision’s cloud streaming rights to Ubisoft, we’ve made sure Microsoft can’t have a stranglehold over this important and rapidly developing market," CMA chief executive Sarah Cardell said in a statement. "As cloud gaming grows, this intervention will ensure people get more competitive prices, better services and more choice. We are the only competition agency globally to have delivered this outcome."

There were suggestions that European Union antitrust regulators might review the amended deal. EU officials approved the acquisition in May after Microsoft made some cloud gaming concessions. According to Bloomberg, the bloc's competition regulators didn't see cause for concern with the amended deal that would prompt another investigation.

After a US court rejected the Federal Trade Commission's attempt to temporarily block the deal pending an administrative trial, the CMA and both companies in question asked a tribunal to delay Microsoft's appeal against the UK regulator's initial decision. The tribunal agreed and, after reviewing the updated proposal from Microsoft, the CMA has rubberstamped the merger. It now seems like just a matter of time until this is a done deal and one of the biggest tech mergers in memory is in the books.

There is one significant potential hurdle remaining, however. The FTC is moving forward with its attempt to challenge the deal. That effort won't stop Microsoft from closing the acquisition, but there's a chance that the FTC could force the company to divest some or all of Activision Blizzard.