South African competition authorities have approved the proposed merger between US-based software giant Microsoft and video game maker Activision Blizzard.
In a statement yesterday, the Competition Tribunal says it has unconditionally approved the proposed merger, which is a global transaction, whereby Anchorage, a wholly-owned subsidiary of Microsoft, intends to acquire Activision.
The tribunal’s reasons for its decision will be issued in due course, says the competition authority.
Under the deal, which was first announced in January last year, Microsoft plans to acquire Activision for $95 per share, in an all-cash transaction valued at $68.7 billion, inclusive of Activision’s net cash.
When the transaction closes, Microsoft will become the world’s third-largest gaming company by revenue, behind Tencent and Sony, says the software firm.
While South African authorities have given the deal the thumbs up, the transaction faces hurdles in other countries.
In the US, the Federal Trade Commission (FTC) approached the courts to halt the proposed $69 billion acquisition.
The FTC believes the merger would give Xbox maker Microsoft exclusive access to Activision games, including “Call of Duty”, one of the best-selling games.
Reuters reports that to address the FTC’s concerns, Microsoft has agreed to license Call of Duty to rivals. According to the publication, Microsoft has pressed for a decision in the court fight before the 18 July termination date for the deal.
It adds that Canadian regulators are scrutinising the deal and they have said it will likely lead to less competition if given the green light.
The deal is also facing opposition from British authorities.
Meanwhile, SA’s Competition Tribunal notes the acquiring group (Anchorage, Microsoft and all firms controlled by Microsoft), through Microsoft, is a global technology company that provides IT-related services.
“Its gaming activities are relevant to this proposed merger. These involve the development, publishing and distribution of games for personal computers, consoles and mobile devices through Xbox Game Studios. Microsoft also publishes games developed by other game developers. It offers Xbox gaming consoles and the Surface series of personal computers,” the tribunal says.
The regulator adds that Activision develops games for computers, consoles and mobile devices, and publishes them in most countries around the world.
“Activision’s most notable content is the Call of Duty series of games, World of Warcraft and Candy Crush, a mobile game. As well as offering paid-for full-games, free-to-play games and in-game content, Activision offers a subscription service for players of the World of Warcraft franchise.”
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