Analysts Believe CMA Report Points To The Activision Deal’s Success

Analysts Believe Deal Is Almost Complete!

Yesterday, the UK regulator, CMA, announced its provisional findings about the Microsoft Activision Blizzard acquisition. The report had many negative implications for the deal, but the CMA also offered a set of remedies for the gaming giant to consider. 

While many were led to believe that the CMA’s report made things even harder for Microsoft, analysts from Wedbush have entirely different thoughts on the events from yesterday. 

Analysts Nick Mckay and Michael Pachter believe that the CMA report is a sign that Microsoft will succeed with the Activision merger. 

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They suggested that the acquisition is close to being approved and went on to say,

“We read today’s release as a signal that UK knows it has a losing legal argument. In our view, the FTC figured this out late last year.”

The analysts also suggested that the FTC and CMA are attempting to one-up each other. They further said,

“The CMA accelerated its formal objection to the deal and proposed remedies to step in front of the FTC and gain bragging rights.”

When considering the remedies offered by the CMA, Michael Pachter and Nick Mckay believe that Microsoft is more likely to agree to behavioral remedies. This would mean that the gaming giant would be open to releasing Call of Duty on all platforms for several years.

Previously, Microsoft offered a ten-year Call of Duty deal to Nintendo and has also claimed that Sony is more interested in talking to regulators than negotiating a deal with Microsoft. Looking at past offers, it is easy to see why the analysts believe that the gaming giant would go this route. 

However, they do not believe Microsoft would allow Call of Duty on other cloud platforms. Presently, Xbox Cloud Gaming is among the biggest competitors in the industry, and Call of Duty would give the platform a massive boost in terms of growth. 

Concluding their thoughts, Nick Mckay and Michael Pachter stated:

“We expect Microsoft’s acquisition to close no later than mid-May.”

What do you think about their analysis? Do you agree or disagree with them? Share your thoughts in the comments below.

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