Bloomberg News reported late on Monday that the US antitrust review of Microsoft’s $68.7 billion proposed acquisition of Activision Blizzard Inc., the maker of Call of Duty will be handled by the Federal Trade Commission (FTC). The report cited someone familiar with the matter.
The FTC, not the Justice Department, will investigate whether the takeover will impact competition. In what’s been viewed as the FTC and Justice Department toughening guidelines surrounding mergers, both authorities jointly said industries have seen more concentrated mergers, as well as a surge in merger filings in 2020 and 2021, signaling the issue, could get worse.
Concern over increasing merger filings
Days after the statement, the FTC voted unanimously to block a proposed $4.4 billion acquisition of rocket engine company Aerojet Rocketdyne Holdings by Lockheed Marti, citing antitrust concerns.
The deal was announced by Microsoft in January and would be the biggest ever all-cash acquisition if it goes through. The move should augment Microsoft’s power in the booming videogame industry to take on leaders like Sony Group and Tencent Holdings.
Meanwhile, Sony announced it plans to acquire Bungle Inc., the original creator of the game ‘Halo’ and developer of ‘Destiny,’ in a deal worth about $3.6 billion.
Unprecedented acquisition wave
The gaming industry is seeing considerable consolidation in recent times. Microsoft has, so far, made the kind of acquisitions that do not attract the same scrutiny as Alphabet or Meta Platforms deals. However, this Activision deal would make the software company the world’s third-largest gaming company. For that reason, it registers significantly on regulators’ radars.
In a previous report, it emerged that Microsoft would pay a $3 billion break-fee if the deal does not go through, showing the OS maker is confident about getting antitrust approval.