Microsoft Corporation (NASDAQ:MSFT) has amended its acquisition proposal for Activision Blizzard, Inc. (NASDAQ:ATVI) in an effort to secure approval from UK regulators. Following the initial rejection of the deal by the Competition and Markets Authority (CMA) in April 2023, Microsoft has made modifications to the terms of its $75 billion acquisition. The initial ban on the deal came from concerns that the buyout may impede innovation in the emerging cloud gaming market.
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The company has been diligently working for more than a year to secure global approval for this deal, which aims to merge its Xbox video gaming business with Activision’s renowned franchises such as Call of Duty and World of Warcraft. Microsoft first announced its intentions to acquire Activision in 2022, initially valuing the deal at $69 billion.
Terms of the Updated Offer
According to the updated terms of the deal, Microsoft intends to transfer the non-European streaming rights for Activision games to French video game company Ubisoft Entertainment SA (FR:UBI). Ubisoft, in return, will possess the capability to grant licenses for Activision’s content to any cloud gaming service.
Ubisoft, which may emerge as a significant beneficiary of the modified agreement, witnessed a jump of over 7% in its shares on Tuesday at the time of writing. MSFT gained 1.71%, while ATVI was trading up by 0.28% after the submission of the amended deal.
Even though Microsoft seems positive about the new deal, CMA’s Chief Executive Sarah Cardell said, “This is not a green light.” With the authorities commencing their investigation again, this update has effectively reset the deal to its initial stages.
A verdict on the revised deal is anticipated by October 18, 2023.
Is Microsoft Share a Buy?
With broad coverage of 35 analyst ratings on TipRanks, MSFT stock received a consensus Strong Buy rating. This comprises 32 Buy, two Hold, and one Sell recommendations. The average price forecast stands at $391.52, reflecting a 21.6% increase from the current trading level.
