Their final decision is June 18 or 19, I forget which. Its normally just a formality, but it does give them the opportunity to fix this.
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I too see it being done by July.
July 2047.
Kidding aside, the fact that weāre debating and questioning MSās UK options here sort of demonstrates how bad this is for business.
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The more Iām thinking it the more it makes sense to move the fight in the UK from a merger question to a enforcement / fine question. The latter the courts has the ability to decide on merit.
So MSās path is as follows.
Appeal first. If CMA volunteers for a remand, great. Weāre likely in the clear.
Extend merger agreement.
If CMA doesnāt volunteer for a remand, appeal in CAT. If CAT makes a strict guideline for CMA, then weāre good to wait for the remand. Otherwise if the CAT remands without strict guidelines, weāll close in EU only and fight the fines in court.
If ABK doesnāt agree to extend the merger, then ask them to divest UK operations into independent company. If they donāt agree to divesting UK operations then the deal is most likely not going to consummate barring some last minute U-turns from the CMA.
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I canāt see any good reason why ABKs share holders would agree to a $69B sale and divest the company entire, but would not agree to divesting their UK business to get the deal done and dusted and not their problem.
Are you suggesting Microsoft abandons the deal if the cma blocks? Yeah Microsoft isnāt doing that, clearly Microsoft holds all the cards now. Presuming Microsoft is confident with their case against the ftc this deal is being fast tracked to close with or without the cmaās permission.
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Ummā¦
You should perhaps take a look at thisā¦
Itās not going to happen!!!
Im not so sure of that. How likely is Microsoft to participate in large mergers when they just receieved so much push back.
I have a feeling theyll want to get this done then chill while regulatory changes. Let some others get beat up for a bit. Lean back and lobby in the UK and US for regulatory changes.
In the meantime they can restock that cash pile.
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This feels like World War moment, where the force chose a battle against a nation that would lead to their demise. Case in point, CMA was accustomed to opposing force that wouldnāt withstand to their tyranny. Little did they know, Microsoft is the sleeping giant that they shouldnāt have awaken.
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Money just depreciates, meanwhile all their competitors (Google, Amazon and Apple will continue to expand rapidly).
5 years in tech is an eternity, being gagged for 5 years will be like a pro boxer having one arm tied behind his back.
Just in the last 5 years MS have made nearly 60 acquisitions, plus countless investments.
With their AI race there is literally no way they would agree to that right now, they might as well wave the white flag to Google.
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I see it as more principled. The facts are on Microsofts side.
38 countries looked at the data so far and said there was either no issues or the pre-emptive remedies resolved them (in fact, they declared them good for competition)
Microsoft shouldnt have to contort its plans - gaming or otherwise -to bend to the wills of regulators who can only win by distorting the data without a court appeal process.
The FTC is politically motivated. The CMA is either dumb or corrupt. None of these should stop the deal.
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Iām suggesting MS abandons the deal if ABK doesnāt want to extend and also doesnāt want to divest UK operations.
I agree, but how long do you delay for 1 country.
I am of the mind that you dont delay at all. Just do whats needed to push it forward and move forward with tour new asset.
That doesnt have to be the concession, but what Im suggesting is they give the CMA one last nice exit point where they can get off the crazy train.
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Until the appeal is done. Worse case is the CMA stands by its moronic block. Microsoft can still close the deal and pay/fight the fine.
In the mean time you go full blast with PR, interviews etc on how the CMA screwed up, how much more intelligent other regulators are.
Whats the worse thatāll happen? The CMA going to expel Microsoft from the countryā¦the company that provides the UKs national digital defense? That provides the software that keeps the country running, communicating, schooling. Nope.
Fine them? They will fight that in courtā¦the high court, the supreme court? Thats exactly where they want to take the CMA. In front of a judge to deem their decision moronic.
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There is certainly a scenario where the answer to that question may be they dont even have that luxury of time. If Activision is okay walking with 3 billion they would need to close.
If this deal fails their stock is going to tank. If call of duty goes to alternate years their stock is going to tank. Microsofts purchase is their retirement plan.
They might renegotiate the price and break up fee, but thereās no real risk for ABK to extend the purchase another 6-8 months. They will either get $69B or $3Bā¦or $69B and $5B.
By the end of June they will have 99% approval, an inept FTC to beat in court and focus all their attention on the CMA. The hard parts almost over. The CMA issue is something that can be managed.
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Yeah definitely that is also a possibility.
Exactly this deal has been good for Activision ever since the announcement. If they abandon not only will their stock tank the spotlight will shine again on them and all their atrocities court battles, unions busting and a whole lot more.
Can Microsoft sue the FTC in federal court in order to advance the acquisition?
Its the opposite. The merger is approved by default in the USA unless the FTC goes to court and wins to stop the merger.
The burden is on the FTC to win in court which they wont cause they have no case.
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Okay. Gotcha. So Microsoft will just wait out the FTC.