MSFT Stock Slumped Amidst Greater Uk Scrutiny on Activision Deal
MSFT stock and other tech stocks have suffered a rough 2022, which can be described as a bear year of the mixed bag of resilience.
As the investigation enters its second phase, a group of impartial reviewers will be added.
The $75 billion deal in one of the biggest markets for interactive entertainment in the world is now uncertain after the U.K.s competition regulator said it would intensify its investigation into whether Microsoft Corp.s (NASDAQ:MSFT) planned acquisition of Activision Blizzard Inc. (NASDAQ: ATVI) could hurt competition in the videogame industry.
The $75 billion merger in one of the biggest marketplaces for interactive entertainment appears to have the potential to hurt competition in the video game industry. The companies were questioned by the Competition and Markets Authority earlier this month in order to resolve concerns about competition.
After Microsoft informed the CMA that it wasnt making any concessions that would have enabled it to quickly obtain regulatory approval, the CMA announced Thursday that it would expand its inquiry. Less than one-third of the over 275 mergers that the CMA has looked into since 2017 have advanced to the second stage. Eight of those were rejected by the CMA, more than a dozen were abandoned, and the remaining ones were authorized or received approval with conditions.
MSFT Stock slides despite assurances
Microsoft cited a previous statement by its president, Brad Smith, in which he said that the business was prepared to cooperate with the U.K. regulator on the following steps and to allay any of its concerns. A request for comment from Sony did not immediately receive a response.
The Federal Trade Commission in the United States is also looking into Microsofts acquisition of Activision. FTC Chairwoman Lina Khan has taken moves to look into additional agreements and behavior that the agency deems to be anticompetitive since taking office in 2021.
Even while the Microsoft-Activision merger is being closely watched in numerous areas, competition attorneys said regulators in the United Kingdom, the European Union, and the United States are most likely to step in. The deal is still being officially reviewed by the EU.
Given that the U.K. is home to a number of renowned game firms, like Electronic Arts Inc., Codemasters, and Take-Two Interactive Software Inc., it is possible that the country is attempting to protect its own companies.
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Author: Jowi Kwasu
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