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Activision stock rises as Japanese FTC says Microsoft deal doesn't limit competition

Seeking Alpha logo Seeking Alpha 3/28/2023

Activision Blizzard (NASDAQ:ATVI) shares rose fractionally in premarket trading on Tuesday as Japan's Fair Trade Commission said the proposed acquisition by Microsoft (NASDAQ:MSFT) does not limit competition.

In a translated statement, the JFTC said the deal would not "substantially restrain competition" and as such, both companies have been notified that a cease desist order would not be issued and the examination was completed.

The announcement from the JFTC comes just days after the U.K.'s antitrust regulator "provisionally concluded" the proposed deal would not reduce competition in the console gaming market.

The surprising announcement from the Competition and Markets Authority sent Activision's (ATVI) share price higher and narrowed the gap closer to Microsoft's (MSFT) proposed offer of $95-per-share in cash.

Last week's announcement from the CMA did not say whether the deal would impact the cloud gaming market, however. The CMA is slated to issue a final report on the matter by April 26.

The Microsoft (MSFT)-Activision (ATVI) deal has come under intense scrutiny across the globe, including in the U.S. by the Federal Trade Commission.

Brazil approved the transaction in October while Chinese game developers were said to give positive feedback on the deal last month. One third-party in China expressed concern about the deal, Seeking Alpha previously reported.

The deal appears on track to receive approval in the European Union, thanks to Microsoft's (MSFT) offers to license video games to its competitors.

Microsoft (MSFT) recently signed deals with Nintendo (OTCPK:NTDOY) and Nvidia (NVDA) to bring games to their respective platforms, including Call of Duty, opening up the popular game to more than 150M new players.

The lone holdout continues to remain Japan's Sony (SONY), which has repeatedly expressed concern about the deal.

Last week, Citi raised its odds that the Microsoft (MSFT)-Activision (ATVI) deal is completed to 70% after the surprise announcement from the CMA.

Now read: Nvidia: ChatGPT Driving This Year's Hype Train (Rating Downgrade)


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