Microsoft’s Victory: Federal Judge Clears the Way for Activision Blizzard Acquisition

After a prolonged delay, the acquisition took a major step towards completion, causing Activision Blizzard’s stock price to surge by 10.2% to $90.99 on the 11th. This marks the highest level in almost two years since July 23, 2021, and brings Microsoft’s stock price closest to its offer price of $95 per share since the announcement of the intent to acquire in January 2022. On the 12th, Microsoft also saw an increase, opening at $334.64, a 0.7% rise.

The acquisition will combine Microsoft’s Xbox gaming business with Activision Blizzard, a globally renowned game developer known for popular titles like “Call of Duty” and “World of Warcraft.” However, Microsoft faced opposition in both the United States and the United Kingdom. The U.S. Federal Trade Commission (FTC) previously sought an injunction from the federal court to prevent Microsoft from including Activision Blizzard under its umbrella.

The merger also faced disapproval in the UK. However, on the 11th, the UK Competition and Markets Authority stated its readiness to consider Microsoft’s proposed solutions to address concerns related to market competition. This indicates an increased possibility of the merger being approved.

U.S. District Court Judge Jacqueline Scott Corley’s ruling stated that the FTC failed to demonstrate how Microsoft’s ownership of Activision’s gaming operations would harm competition in the console or cloud gaming markets. The ruling highlighted that there is evidence that more consumers would have access to “Call of Duty” and other Activision game content as a result. The FTC expressed disappointment with the ruling and will announce its next steps in the coming days. While the FTC can file an appeal, it is not commonly done.

European stock markets experienced a temporary jump, with the UK market rising over 1.5% and the German market surging by more than 1% following the data release.

On the other hand, the U.S. dollar index futures, which measures the dollar against a basket of six major currencies, faced a significant decline, approaching the 101 level, down 0.55% to 101.17.

In the commodities market, COMEX gold futures briefly soared above $1,950, reaching a high of $1,955.55 per ounce.

According to insider sources, Microsoft could finalize the acquisition as early as next week. Based on Berkshire Hathaway’s ownership of nearly 50 million shares in Activision Blizzard, estimated profits of $1 billion could be realized, provided that Berkshire Hathaway has not sold any of its holdings since disclosing its $4.2 billion stake by the end of the first quarter.

Berkshire Hathaway bought shares of Activision Blizzard in the fourth quarter of 2021, and shortly after, Microsoft announced its intent to acquire the gaming giant. Buffett promptly ordered an increase in his holdings of Activision stock.

The federal judge’s ruling and the imminent completion of the acquisition mark a major milestone for Microsoft and Activision Blizzard. This merger has the potential to reshape the gaming industry and enhance Microsoft’s position in the market.