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What occurred
On a report that its deliberate tie-up with an enormous peer is likely to be heading into tough regulatory waters, Activision Blizzard (ATVI -2.74%) inventory took a physique blow from traders on Tuesday. They traded the online game big’s shares down by almost 3%, on a day when the S&P 500 index slid by solely 0.2%.
So what
Early that morning, Reuters reported that that there’s a sturdy chance for the European Union (EU) to situation a proper antitrust warning to would-be Activision Blizzard acquirer Microsoft (MSFT 0.47%).
Citing unnamed “individuals acquainted with the matter,” the information company stated that the EU’s government physique and frequent regulator, the European Fee (EC), is making ready an announcement of objections to the proposed deal. This could be issued inside a matter of weeks.
Microsoft and Activision Blizzard have agreed for the previous to buy the latter in a blockbuster deal valued at $69 billion. This was introduced virtually precisely one yr in the past.
Reuters quoted Microsoft as saying that “We’re persevering with to work with the European Fee to handle any market considerations. Our objective is to carry extra video games to extra individuals, and this deal will additional that objective.”
Activision Blizzard has not but formally commented on the matter.
Now what
Though Microsoft has, considerably uncharacteristically, sounded cooperative notes about the way it’ll cope with regulators, this deal is likely to be a troublesome swallow for a few of them. In spite of everything, it could marry a strong software program and cloud firm with a dominant video game producer and developer, concentrating a lot energy and attain in just one entity.
The regulatory facet of the deal is beginning to get complicated, which could not bode nicely in any respect for its destiny.
Eric Volkman has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Activision Blizzard and Microsoft. The Motley Idiot has a disclosure policy.
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