The UK Blocked The Microsoft-Activision Merger, So What Happens Next?

Microsoft’s $68.7 billion buyout of Activision Blizzard, the company behind Call of Duty, has hit a major roadblock. Despite being approved in several countries, the UK’s Competition & Markets Authority (CMA) announced on Wednesday that it would block the deal, citing concerns about the cloud gaming market. The decision, a surprise to many in the industry, has sparked questions about what happens next and how Microsoft could be on the hook for billions of dollars in a breakup fee.

What Happens Next

In response to the CMA’s decision, Activision Blizzard said it plans to work with Microsoft “aggressively” to reverse the decision on appeal. Microsoft President Brad Smith also weighed in, saying the company is “fully committed” to getting the deal done and will appeal the decision. Industry experts have suggested that Microsoft could address the CMA’s concerns by keeping Activision Blizzard content off Game Pass in the UK and committing to keeping Game Pass prices stable in the country for the next decade.

A Huge Payout If The Deal Falls Through

If the deal to buy Activision Blizzard falls through, Microsoft would be required to pay a “reverse termination” fee of $3 billion to Activision Blizzard. The payment would have been $2 billion if the termination notice had been provided before January 18, 2023, or $2.5 billion if it had happened between then and April 18, 2023. If Activision Blizzard were the party to cause the deal to fail, it would pay Microsoft a termination fee of $2.27 billion. Either way, the stakes are high for both companies.

The US and EU Cases

The CMA’s decision is not final; the agency has said that Microsoft and Activision Blizzard can appeal the decision. However, the case will likely take longer to be resolved in the US and EU. The Federal Trade Commission has sued Microsoft to try to block the deal, with an evidentiary hearing scheduled for August 2, 2023. The EU Commission is expected to deliver its final decision by May 22. Industry analysts have suggested that Microsoft is unlikely to walk away from the deal and will pursue remedies in court if necessary.


The fate of Microsoft’s acquisition of Activision Blizzard remains uncertain; however, if the deal ultimately falls through, Microsoft could be on the hook for billions of dollars in a breakup fee. The company has not indicated what it would do with the $68 billion it planned to use for the acquisition if the deal falls apart. We’ll continue to monitor this ongoing story and bring you updates as they become available.


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