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Highlights
- The commission will probe whether the takeover will harm competition.
- Regulators plan to toughen the merger rules to discourage big companies from acquiring smaller rivals.
- In the past two years, merger filings have surged in the US. Regulators fear the situation could worsen.
The Federal Trade Commission (FTC) is expected to open an antitrust probe into Microsoft Corporation’s US$68.7 billion mega-deal to acquire gaming company Activision Blizzard Inc (ATVI), media reports said.
According to a person familiar with the matter, whom Bloomberg cited, the FTC would soon start an antitrust review of the proposed acquisition.
The commission will probe whether the takeover will harm competition, the report said.
Activision Blizzard is the publisher of popular video game franchises such as "Call of Duty".
Regulators plan to toughen the merger rules to discourage big companies from acquiring smaller rivals. In the past two years, merger filings have surged in the US. They fear the situation could worsen.
Generally, the Justice Department investigates such cases. This time, however, the FTC has taken up the case. Earlier, the FTC had unanimously voted to block arms maker Lockheed Martin's proposed US$4.4 billion purchase of rocket engine maker Aerojet Rocketdyne Holdings over antitrust fears.
Microsoft's US$68.7 Billion Mega-Deal for Activision under cloud? || Breaking News
Microsoft had announced the Activision deal in January, its biggest-ever acquisition on record.
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Source: Pixabay
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The purchase to bolster Microsoft's videogaming business
The acquisition is expected to bolster Microsoft's successful videogaming business while putting it in a better position to take on its main rivals, Tencent Holdings Ltd and Sony Group Corp.
Days after Microsoft’s announcement, Sony Corp also had revealed plans to acquire Bungie Inc, the creator of videogames like "Halo" and "Destiny" for US$3.6 billion.
The deal would make Microsoft the world's third-largest gaming company. So far, the Xbox maker hasn't faced stricter regulatory scrutiny like Alphabet Inc and Meta Platforms Inc.
Sources, cited by Reuters, said that the Redmond, Washington-based tech giant would pay US$3 billion if the Activision deal falls apart, suggesting it was sure of winning antitrust approval.
The transaction is expected to complete in June 2023.
Microsoft (MSFT) stock was down 0.81% to US$308.45 at 4:00 pm ET on Tuesday.
