![Judge dismisses FTC efforts to block Microsoft-Activision merger](https://image.cnbcfm.com/api/v1/image/107269768-16890954731689095468-30258307877-1080pnbcnews.jpg?v=1689098942&w=750&h=422&vtcrop=y)
A federal judge in San Francisco has denied the Federal Trade Commission’s request for a preliminary injunction to stop Microsoft from completing its acquisition of video game publisher Activision Blizzard.
Nevertheless, the deal isn’t entirely clear. The FTC can now take the choice to the U.S. Court of Appeals for the ninth Circuit, and the 2 corporations must discover a approach to resolve the objection from the UK Competition and Markets Authority.
“The responsibility of this court on this case is narrow. It’s to make your mind up whether, despite the present circumstances, the merger must be placed on hold – even perhaps terminated – pending resolution of the FTC’s administrative proceedings,” Judge Jacqueline Scott Corley wrote in her decision, published on Tuesday. “For the explanations explained, the Court finds that the FTC has did not reveal likelihood of success in its claim that this particular vertical merger on this particular industry is more likely to significantly reduce competition. Quite the opposite, the evidence gathered points to greater consumer access to Call of Duty and other Activision content. Due to this fact, the applying for a preliminary injunction is REJECTED.
Microsoft CEO Satya Nadella arrives in San Francisco court on June 28, 2023.
Shelby Knowles | Bloomberg | Getty Images
Activision Blizzard shares hit a session high and a 52-week high of $92.91 per share following a choice by the U.S. District Court for the Northern District of California. Microsoft agreed to purchase the sport’s publisher for $95 a share. Activision Blizzard shares closed Tuesday’s trading session at $90.99 a share, up 10%.
“We’re optimistic that today’s ruling signals the approach to full regulatory approval in other parts of the world, and we stand able to work with UK regulators to resolve any remaining issues in order that our merger will be closed quickly,” Activision Blizzard CEO Bobby Kotick wrote. . note to employees.
Microsoft also praised the choice.
“We’re grateful to the San Francisco court for this prompt and thorough decision, and we hope that other jurisdictions will proceed to work towards a timely resolution,” Brad Smith, Microsoft president and vp, said in a press release. “As now we have demonstrated consistently throughout this process, we’re committed to working creatively and collaboratively to handle regulatory issues.”
The choice comes after five days of court hearings to evaluate whether Microsoft it will have the opportunity to finish $68.7 billion Activision Blizzard the acquisition was announced in 2022. Judge resolve whether to grant the FTC’s request for an emergency injunction to forestall the transaction from being closed.
The FTC argued that Microsoft had shown an interest in exclusive games to forestall them from appearing on the Sony PlayStation or Nintendo Switch, and that it could achieve this if the deal were finalized. But Microsoft said the corporate would love Activision’s titles to be more accessible, not less, partly to grow from individuals who subscribe to its Game Pass game library. Kotick and Microsoft CEO Satya Nadella testified, as did Alphabet, Nvidia and Sony executives.
In December, the FTC filed a lawsuit to dam the transaction and have it reviewed by an administrative law judge on the agency. But in June, before that happened, the FTC requested a preliminary injunction to forestall Microsoft from completing the acquisition, with the intention of bringing the case to administrative court on August 2. Each corporations desired to close the deal by August 2. July 18.
“We’re disenchanted with this end result given the clear threat this merger poses to open competition in cloud gaming, subscription services and consoles. We shall be announcing our next step in the approaching days to proceed our fight to preserve competition and protect consumers,” an FTC spokesperson said.
Kotick said during hearings that Activision Blizzard’s management didn’t see how the deal could go ahead if a judge issued a preliminary injunction.
The judge modified the temporary restraining order she imposed in June to run out at 11:59 p.m. on July 14 unless the FTC receives an appeal from the ninth Circuit.
Meanwhile, each corporations are turning their attention back to Europe.
“Following today’s US court decision, our focus is now back on the UK. While we ultimately disagree with the CMA’s concerns, we’re considering how the transaction might be modified to handle these concerns in a way acceptable to the CMA,” Smith said in a press release. “To prioritize work on these proposals, Microsoft and Activision have agreed with the CMA that it will be in the general public interest to suspend the dispute within the UK, and the parties have made a joint application to the Competition Appeal Tribunal. “
Microsoft and the CMA have agreed to a minor divestment to allay regulator concerns, CNBC’s David Faber reported.