The Federal Trade Commission (FTC) will oversee Microsoft’s proposed $68.7 billion (approximately Rs. 5,10,990 crore) acquisition of Call of Duty developer Activision Blizzard Inc, Bloomberg News reported late Monday, citing a source familiar with the situation. According to the article, the FTC, not the Justice Department, will investigate whether the takeover will hurt competition.
The FTC and the Justice Department jointly stated last month that industries had become increasingly consolidated, and that a surge in merger filings in 2020 and 2021 showed that the situation will worsen.
Days ago, the FTC unanimously voted to sue to prevent Lockheed Martin from buying rocket engine producer Aerojet Rocketdyne Holdings for $4.4 billion (approximately Rs. 32,890 crore) on antitrust grounds. Requests for response from Microsoft, Activision, and the FTC were not immediately returned by Reuters.
Microsoft announced its largest-ever deal in January, and it is expected to be the largest all-cash acquisition ever. It will strengthen Microsoft’s position in the expanding videogame business, where it competes against market giants Tencent and Sony.
Similarly, Sony said on Monday that it will buy Bungie, the original creator of the Halo videogame and the developer of Destiny, for $3.6 billion (approximately Rs. 26,910 crore), the latest in a wave of gaming industry consolidations.
Microsoft has escaped the scrutiny that Alphabet and Meta Platforms have experienced in the past, but this merger, which would make it the world’s third largest gaming company, will put the Xbox maker on regulators’ radars, according to Andre Barlow of the law firm Doyle, Barlow & Mazard. As per a source familiar with the subject, Microsoft will pay a $3 billion (approximately Rs. 22,420 crore) break-fee if the purchase falls through, implying the business was certain of getting antitrust approval. Microsoft and Activision set a deadline of June 2023 to complete the deal.