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Microsoft / Activision Deal Approval Watch |OT| (MS/ABK close)
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MasterCornholio
Member
Astray
Member
Would be a major risk for them because Nintendo seems like it's still gonna be heading towards low-powered machines for portability.
DrFigs
Member
he sounds different from what i remember
reinking
Gold Member
Beggers can't be choosers....
I'm joking... ..neither MS or Sony are going to willingly give up COD regardless of the current environment.
Bernoulli
M2 slut
SneakersSO
Member
I believe the exact date is July 18th - I could be wrong on that but thats around the time the date is set anyway. That day is essentially the day the Merger Agreement expires, effectively, and when ATVI would become entitled to the full break-up fee. ATVI is under no obligation to re-sign another merger agreement, and doing so will require another round of negotiations, another vote from the ATVI shareholders/board, and almost assuredly, ATVI will ask for more than just $96 per share in order to agree to it.
There are a plethora of reasons why ATVI might not want to re-sign the merger agreement this time around. Signing it would bar ATVI from conducting any business deals with any other entities, and the time table to get the approval will stretch well into 2024, potentially even 2025, and the outcome is almost assuredly still a block. ATVI may not want to handcuff themselves for that long considering their biggest marketing deal is already set to expire in that timeframe, and that business partner is planning on launching a number of potential competitors into the space that CoD operates. Nintendo will also be signing deals with large 3rd party publishers in the next 6-24 months in an effort to launch their new hardware, and signing a merger agreement in July likely would prevent them from even considering it. On top of that, the $96 per share was already largely considered to be a vast inflation of the actual worth of ATVI - getting MS to agree to something north of $100 per share, when the prospect of it even being allowed is this negative, seems like a fool's errand.
Most importantly though - the environment that caused Kotick to seek a buyer in November of 2021 is simply not the environment ATVI is currently in. Back then, ATVI was facing some rough internal forecasts on the backs of their major revenue earners all having bad roads ahead of them, either due to delays or lowered earnings expectations. On top of that, in November 2021 is when the first major stories of lawsuits hitting ATVI got out. Those stories and their lawsuits along with the negative fiscal outlook all spelled a scenario where the board could want to remove Kotick from leadership, a scenario in which he'd wind up with nothing, so its very easy to draw the conclusion that Kotick sought a buyer in Nov. 2021 purely out of self-preservation/self-interest. However, ATVI is just not in that position anymore though - the bigger law suits have been settled or dropped, D4/OW2 launched and are bringing in revenue, and CoD is still trucking along. And on top of all that, they just got the right to $3b, for free. So if i'm Kotick, i'm not quite sure trying to draw out an acquisition that might just get blocked regardless is the best course of action come July.
Topher
Gold Member
This is a good writeup of what comes next with the CMA and the CAT. My comments in red.
The ruling was a shock after the regulator had already resolved its concerns about the consoles market, a sector dominated by Sony's PlayStation and Microsoft's Xbox, which dwarfs cloud gaming.
The regulator's decision reflected a flawed understanding of the market, it said.
Microsoft will not be able to offer new remedies at this stage, such as offering to keep Activision content off its Xbox Game Pass, a subscription service for Xbox users, in Britain, as some analysts suggest. <-- such as Michael Pachter
"The CAT will not engage with the merits of the CMA's decision or conduct a wholesale review of the parties' evidence," said Edward Lane, senior associate at law firm Harbottle & Lewis, where his particular focus is on creative industries, including film, TV, video games and music.
"The CAT aims to deal with 'straightforward' cases in under nine months – and Microsoft/Activision is anything but straightforward," Lane, said.
"The likelihood is that without a material change in circumstances or new evidence, the CMA is most likely to reach the same conclusion as it did first time around," said James Groves, a competition associate at European law firm Fieldfisher. <--MS winning appeal doesn't mean the deal is approved
If either of those blocks the deal, it could be game over, Lane said.
If the EU goes against it, Microsoft would be fighting an increasingly uphill battle and could decide to cut its losses, even if that would mean paying Activision a hefty $3 billion break fee.
Meta succeeded on a single procedural ground, with the decision otherwise upheld. The CMA considered new submissions, but it came to the same view and Meta had to sell animated images platform Giphy.
Global financial services company FNZ appealed a block on its 2019 merger with rival GBST. The regulator then "identified certain potential errors" in its investigation chaired by Martin Coleman, who also oversaw the Microsoft-Activision case.
The CAT sent the case back to be reconsidered, and the CMA agreed to accept a new remedy whereby FNZ could sell GBST and then buy parts of it back. <-- new remedies can be offered only after the case is sent back to CMA
/cloudfront-us-east-2.images.arcpublishing.com/reuters/GKAIQ2ZYSBLQBCZ7NTCBL7VB4E.jpg)
www.reuters.com
The ruling was a shock after the regulator had already resolved its concerns about the consoles market, a sector dominated by Sony's PlayStation and Microsoft's Xbox, which dwarfs cloud gaming.
IS THE DEAL DEAD?
Not necessarily. Microsoft said it remained fully committed and would appeal.The regulator's decision reflected a flawed understanding of the market, it said.
HOW DOES THE APPEAL PROCESS WORK?
Microsoft can appeal to Britain's Competition Appeal Tribunal (CAT), an independent judicial body, which will only examine the CMA's decision-making process, not the merits of the merger.Microsoft will not be able to offer new remedies at this stage, such as offering to keep Activision content off its Xbox Game Pass, a subscription service for Xbox users, in Britain, as some analysts suggest. <-- such as Michael Pachter
"The CAT will not engage with the merits of the CMA's decision or conduct a wholesale review of the parties' evidence," said Edward Lane, senior associate at law firm Harbottle & Lewis, where his particular focus is on creative industries, including film, TV, video games and music.
WHAT'S NEXT?
Microsoft must appeal by May 24 and a decision may take many months."The CAT aims to deal with 'straightforward' cases in under nine months – and Microsoft/Activision is anything but straightforward," Lane, said.
WHAT HAPPENS IF MICROSOFT WINS?
The Tribunal will return the case to the regulator for further review. Microsoft can then offer new concessions."The likelihood is that without a material change in circumstances or new evidence, the CMA is most likely to reach the same conclusion as it did first time around," said James Groves, a competition associate at European law firm Fieldfisher. <--MS winning appeal doesn't mean the deal is approved
WHAT ABOUT OTHER REGULATORS?
European regulators will rule on the world's biggest gaming deal by May 22. The U.S. Federal Trade Commission filed a complaint to block the deal, which Microsoft has indicated it will fight.If either of those blocks the deal, it could be game over, Lane said.
If the EU goes against it, Microsoft would be fighting an increasingly uphill battle and could decide to cut its losses, even if that would mean paying Activision a hefty $3 billion break fee.
WHAT HAS HAPPENED TO OTHER CMA APPEALS?
Facebook-owner Meta (META.O) appealed a 2021 decision by the CMA to block its acquisition of Giphy, seen as a test case for the British regulator's resolve to take on "Big Tech".Meta succeeded on a single procedural ground, with the decision otherwise upheld. The CMA considered new submissions, but it came to the same view and Meta had to sell animated images platform Giphy.
Global financial services company FNZ appealed a block on its 2019 merger with rival GBST. The regulator then "identified certain potential errors" in its investigation chaired by Martin Coleman, who also oversaw the Microsoft-Activision case.
The CAT sent the case back to be reconsidered, and the CMA agreed to accept a new remedy whereby FNZ could sell GBST and then buy parts of it back. <-- new remedies can be offered only after the case is sent back to CMA
Explainer: What next for Microsoft's $69 billion Activision deal after UK ban?
Britain's Competition and Markets Authority (CMA) on Wednesday blocked Microsoft's $69 billion acquisition of 'Call of Duty' maker Activision Blizzard over concerns it would hinder cloud gaming.
www.reuters.com
Aaron Olive
Member
the memes have not disappointed
mansoor1980
Gold Member
Astray
Member
I mean yeah they won't, this entire regulatory exercise was the best free marketing for COD as a franchise, but now you have to make marketing deals with a company you might be in litigation against for 3 billion, or you have to make them with Sony, who you spent a year plus antagonising despite them giving you the best possible deal (massive irl marketing help AND a discount on their typical %30 take!), or you take your bets with Nintendo during their new console transition phase, and see if your customers would flock there.
All these options are not great imo. The best might be Nintendo, but that's a risk because Nintendo has not yet shown that it has the ability to sustain consecutive successful launches in the 2010s, so there's a risk there.
Note that this example is actually a structural remedy!The CAT sent the case back to be reconsidered, and the CMA agreed to accept a new remedy whereby FNZ could sell GBST and then buy parts of it back. <-- new remedies can be offered only after the case is sent back to CMA
Explainer: What next for Microsoft's $69 billion Activision deal after UK ban?
Britain's Competition and Markets Authority (CMA) on Wednesday blocked Microsoft's $69 billion acquisition of 'Call of Duty' maker Activision Blizzard over concerns it would hinder cloud gaming.
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Thirty7ven
Banned
Edmund
Member
I wish I can find a girl who loves me as much as Senjutsu Sage loves the Xbox.
I can feel his passion through my screen. I know i got banned for my Xbox fanboy tier list but my god this guy is SSS tier. He's like the boss in video-games that you're not supposed to beat. The ones that u do 1 damage on him with your best attack and he instant KOs your entire party.
I can feel his passion through my screen. I know i got banned for my Xbox fanboy tier list but my god this guy is SSS tier. He's like the boss in video-games that you're not supposed to beat. The ones that u do 1 damage on him with your best attack and he instant KOs your entire party.
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Thirty7ven
Banned
I hope next time we hear from Brad Smith he’s in front of the CMA offices holding a press conference and telling us about the envelope he’s carrying in his back pocket with the appeal written in 5 strong words “Decision is a fuckin joke”
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Astray
Member
Topher
Gold Member
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PaintTinJr
Member
Yeah, this deal is probably more like this one, which I'm surprised took a whole year just to tell them, no to an appeal (assuming I'm reading that right). I suspect the process has been made quicker, and this deal would get fast tracked if possible given the influence/power of the buyer.
https://www.gov.uk/cma-cases/sabre-farelogix-merger-inquiry#competition-appeal-tribunal-judgment
Varteras
Gold Member
TheGodfather07
Member
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Dick Jones
Gold Member
What's a Yuuth?Microsoft's defense in a nutshell.....
Varteras
Gold Member
Two YOUTTTHHHHSSS!
Sanepar
Member
Reading this looks like is over.
PharaoTutAnchAmun
Member
He is also suffering from a shellshock after the CMA dropped the bomb....
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IlGialloMondadori
Member
Cory Doctorow‘s take.
https://pluralistic.net/2023/04/27/convicted-monopolist/#microsquish
“Preventing monopoly formation is infinitely preferable to breaking up monopolies after they form. That's why the golden age of trustbusting (basically, the period starting with FDR and ending with Reagan) saw action against "incipient" monopolies, where big companies bought lots of little companies.
When we stopped worrying about incipiency, we set the stage for today's Private Equity "rollups," where every funeral home, or veterinarian, or dentists' practice is bought out by a giant PE fund, who ruthlessly enshittify it, slashing wages, raising prices, stiffing suppliers and reducing quality:
https://pluralistic.net/2022/12/16/schumpeterian-terrorism/#deliberately-broken
Limiting antitrust enforcement to policing monopolies after they form has been an absolute failure. The CMA knows that an ounce of prevention is worth a pound of cure – indeed, we all do.”
https://pluralistic.net/2023/04/27/convicted-monopolist/#microsquish
“Preventing monopoly formation is infinitely preferable to breaking up monopolies after they form. That's why the golden age of trustbusting (basically, the period starting with FDR and ending with Reagan) saw action against "incipient" monopolies, where big companies bought lots of little companies.
When we stopped worrying about incipiency, we set the stage for today's Private Equity "rollups," where every funeral home, or veterinarian, or dentists' practice is bought out by a giant PE fund, who ruthlessly enshittify it, slashing wages, raising prices, stiffing suppliers and reducing quality:
https://pluralistic.net/2022/12/16/schumpeterian-terrorism/#deliberately-broken
Limiting antitrust enforcement to policing monopolies after they form has been an absolute failure. The CMA knows that an ounce of prevention is worth a pound of cure – indeed, we all do.”
Dick Jones
Gold Member
Phil looks like he doesn't want that merger to happen. Anyone see what's on his shelf?
Varteras
Gold Member
Looks like 5 anacondas.
gothmog
Gold Member
enshittify is my new favorite word.
Except in this case it is helping create a monopoly.
dotnotbot
Member
I see you are still missing the point so let me remind you - it's an anti-trust case against Microsoft, not Sony. Microsoft's purchase, not Sony's.
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Topher
Gold Member
What monopoly is being created?
MasterCornholio
Member
IlGialloMondadori
Member
FrankWza
Member
Dick Jones
Gold Member
Phil Spencer's arse has signed 4 10-inch deals
Varteras
Gold Member
The fantasy one. The desire to see Microsoft buy up the industry, and give them all the games "for free", veiled behind faux concern of the health of the industry in a last gasp to cause FUD. That was obvious from the rhetoric of which publisher Microsoft should buy after ABK went through. Standing in stark contrast to their insistence that Xbox isn't going anywhere and people are stupid for thinking it. And yet... now...
FrankWza
Member
Varteras
Gold Member
If the current acquisition proposal expires in July and given than it will be impossible to solve anything through appeals by then I also expect Activision to bail out for the reasons you perfectly explained.
The conditions around the deal have considerably changed, when it was announced the parts stupidly believed that it would go almost like with Bethesda.
Kotick wanted a way out of a situation that he was able to dodge anyway in the meantime and the company is reporting solid financial results.
Now it's a deal with a really poor chance to survive, continuing to bet on it would compromise Activision's long term ability to take key strategical decisions (same goes for MS) and that for a really uncertain outcome.
At that point it would be hard for shareholders to approve the proposal again unless Microsoft agrees to pay much more for the high risk of failure.
Both Kotick and Spencer in their mails are already talking about both being strong enough to be able to go on separately and it's not a coincidence.
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Varteras
Gold Member
Normally I hate reading long posts, but that's usually because most of them are either too long to make the damn point they could in half the words, or the person who typed it is a moron. I do enjoy reading your thoughts.
As far as the M&A landscape now, with this very large, very public deal being blocked, what is the likelihood that other major companies, like EA or T2, stay clear of any first-party attempts to acquire them? Would they look at this and think, "poison pill" for their near and mid-term plans?
Topher
Gold Member
Here is the merger agreement. July 18th is the date, I believe, from reading Article VIII.
jm89
Member
He couldn't even be normal for 2 seconds
DarkBatman
SBI’s Employee of the Year
The funny thing is that after the deal was blocked, he proudly posted here that he didn't want to get upset and react like a big boy. This project felt like it lasted ten seconds, then it escalated again.
DeepEnigma
Gold Member
Like Windows?
MasterCornholio
Member
He was going to explode when he came back no matter the result. He just had it bottled up in him due to his ban.
Topher
Gold Member
Found this document that has all the requirements and background of the merger agreement.
I didn't realize that this deal originated from Microsoft inquiring about the possibility of acquisition. Maybe that was common knowledge and I didn't know.
tm225196-3_prem14a - none - 30.4845416s
www.sec.gov
I didn't realize that this deal originated from Microsoft inquiring about the possibility of acquisition. Maybe that was common knowledge and I didn't know.
MasterCornholio
Member
I believe I saw someone say that before here. Basically Microsoft asked Activision if they wanted to sell. Then Bobby looked around for other buyers and settled with Microsoft due to the amount they offered.
bender
What time is it?
OmegaSupreme
advanced basic bitch
How he keeps showing his face around here is really something.
Varteras
Gold Member
graywolf323
Member
well he won’t be anymore it seems
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