EXCLUSIVE: Microsoft to win EU approval on Activision with licensing deal, sources say

BRUSSELS, March 2 (Reuters) – Microsoft Corp ( MSFTO ) is expected to win European Union antitrust approval for its $69 billion takeover of Activision ( ATVIO ) by awarding licensing deals to its rivals, three people familiar with the matter said. , helps clear a big hurdle.

Microsoft announced a bid for Activision in January last year, its biggest ever, to take on Tencent ( 0700.HK ) and Sony ( 6758.T ) in the growing video gaming market, and Metaverse, the virtual online worlds where people live. Work, play and socialize.

The European Commission, which is scheduled to make a decision on the deal by April 25, will not require Microsoft to sell assets to get its approval, the people said.

In addition to licensing deals for competitors, Microsoft may have to offer other behavioral remedies to address concerns of parties other than Sony, one of the people said. Such solutions usually refer to the future behavior of the merged entity.

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Activision shares were up 1.8% in premarket trading after the Reuters story was published, and 2.6% in late trading.

Microsoft Chairman Brad Smith said last month that the US software group was willing to offer licensing deals to rivals to address antitrust concerns, but that it would not sell Activision’s lucrative “Call of Duty” franchise.

Activision Blizzard’s games characters show the Microsoft logo in this illustration taken on January 18, 2022. REUTERS/Dado Ruvic/Illustration

Smith said it’s not possible or realistic to think that one game or one slice of Activision can be carved out and separated from the others.

The EU competition regulator declined to comment.

Microsoft said it is “committed to providing effective and easily implementable solutions that address the European Commission’s concerns.”

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“Our commitment to providing long-term 100% equal access to Call of Duty to Sony, Steam, Nvidia and others protects the benefits of the agreement for gamers and developers and increases competition in the marketplace,” a Microsoft spokesperson said.

Last month, Microsoft signed 10-year licensing deals with Nintendo ( 7974.T ) and Nvidia ( NVDA.O ) to bring Call of Duty to their gaming platforms, with the deals conditional on a green light for Activision’s deal. .

The deal faces regulatory intervention in Britain, where the UK competition agency has suggested that Microsoft divest Call of Duty to address its concerns, while the US Federal Trade Commission (FTC) has asked a judge to block the deal.

Statement by Fu Yun Che; Editing by Hugh Lawson, Elaine Hardcastle, Jane Merriman and Marguerita Choy

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