SUMMARY
- Activision Blizzard shares surged by 11% after a court decision favored the Microsoft acquisition, hitting a one-year high of $92.91.
- Despite the court's decision, the Federal Trade Commission may appeal, and there are hurdles to cross with the UK's Competition and Markets Authority.
- Activision Blizzard CEO, Bobby Kotick, expressed readiness to work with UK regulators, hoping to close the merger swiftly.
The gaming industry witnessed a thrilling uplift when Activision Blizzard's stock skyrocketed by 11% on a Tuesday, following a court ruling that sided with tech titan Microsoft in its hotly debated acquisition bid. The rise in stock value shot Activision Blizzard's shares to a one-year zenith of $92.91 per share, signaling the largest leap since Microsoft's initial announcement of the acquisition deal on January 18, 2022. Furthermore, the shares appear poised to reach their loftiest closure point since July of the previous year.
Microsoft, in its ambitious expansion plan, had set the table with a whopping $68.7 billion offer, equivalent to $95 per share, to purchase Activision Blizzard. However, the proposed acquisition hasn't been a smooth sail, encountering substantial resistance both domestically and globally. The heart of the opposition lies in the fear that this merger might choke competition within the video gaming industry.
In a significant turning point, the U.S. District Court for the Northern District of California issued a ruling in favor of Microsoft and Activision Blizzard, causing joy and optimism in their respective camps. In her pronouncement, Judge Jacqueline Scott Corley stated that the FTC had not sufficiently demonstrated that the proposed vertical merger in the unique realm of the gaming industry would lead to substantial reduction in competition.
Despite this triumph, the companies still need to navigate carefully as the merger isn't entirely out of the woods yet. The Federal Trade Commission has the legal option to appeal to the U.S. Court of Appeals for the 9th Circuit. On the international front, the duo also has to address concerns raised by the Competition and Markets Authority in the United Kingdom.
In a memo to employees on Tuesday, Activision Blizzard CEO, Bobby Kotick, displayed optimism, stating, "We’re hopeful that today’s ruling indicates a route towards comprehensive regulatory approval worldwide. We stand ready to cooperate with UK regulators to alleviate any residual apprehensions so that our merger can proceed swiftly."
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