Microsoft’s planned takeover of video game developer Activision Blizzard, which was officially announced at the beginning of the year, could not take place because of intensifying antitrust scrutiny.
According to unnamed sources close to the matter, insiders at Activision Blizzard believe that the announced $68.7-billion deal is threatened because Microsoft was not expecting the current level of regulatory scrutiny.
For the time being, regulatory bodies in the UK, the US, and the European Union (EU) are inspecting the proposed takeover deal. Moreover, a sense of resentment between the seller and buyer has appeared, as some at the video game publisher have been calling for the US technology giant to deal with potential regulatory hurdles to complete the acquisition eventually.
Preliminary estimates have said that the proposed takeover would be the largest deal in Microsoft’s 45-year history, with a price of $95 per share for Activision Blizzard’s assets. Unfortunately, the company’s stock never reached $95 and closed just below $72 on November 4th trading, which indicated increasing concerns that the planned deal will not be finalized.
Activision Blizzard stands behind some iconic gaming releases and successful gaming franchises, including Diablo, Call of Duty, Warcraft, Candy Crush, and Overwatch. Unfortunately, apart from being famous and successful titles, the aforementioned games have also been causing some concern among regulatory bodies.
Both competent industry watchdogs and Microsoft competitor Sony have shared their concern that the US technology giant will not release Activision Blizzard’s Call of Duty on Sony’s PlayStation because Microsoft is the manufacturer of its rival console Xbox. Reportedly, Microsoft has promised to continue the release of Call of Duty on PlayStation and probably start offering it on other video game platforms. However, the US technology giant has still not provided regulators with a blueprint for how it plans to do such an integration, which worries both watchdogs and Sony. As reported by the New York Post, a wide-ranging investigation could be rolled out into the deal by the European Union regulators by the end of the week.
Alleged Ties to the Casino Industry on the Way of Planned Microsoft/Activision Blizzard Acquisition
Since it was officially announced in January 2022, the deal between Microsoft and Activision Blizzard has been considered quite controversial, even though neither one of the two companies bore responsibility for that, provoking such feelings with ties to the casino industry.
Earlier this year, in an April 8-J filing with the Securities and Exchange Commission (SEC), the Call of Duty developer revealed that the Commission tabled a voluntary request for information. At the time, the video gaming company also revealed that had received a grand jury subpoena from the US Department of Justice (DoJ) with respect to insider option trades that could be potentially placed before the announcement of the proposed acquisition. Barry Diller, chairman of IAC/InterActiveCorp, which is currently the biggest non-fund investor in MGM Resorts International, is at the center of the regulatory investigation.
Although Mr. Diller was not directly mentioned in the filing at the time, he, his stepson Alexander von Furstenberg, as well as entertainment magnate David Geffen, are being investigated by the Securities and Exchange Commission and the Department of Justice.
The federal probe into the aforementioned individuals resulted in some delays in the competent regulatory bodies in Nevada granting Diller a gaming permit in the state. He eventually received a limited operating permit in May 2022. Currently, the 80-year-old Mr. Diller and the CEO of IAC, Joey Levin, are both members of MGM’s Board of Directors.