Exclusive: Microsoft poised to win EU nod on Activision with licensing deal, sources say

BRUSSELS, March 2 (Reuters) – Microsoft Corp ( MSFT.O ) is expected to secure EU antitrust approval for its $69 billion acquisition of Activision ( ATVI.O ) with the offer of licensing deals to rivals, three people familiar with the matter said the case. , and helps it clear a large obstacle.

Microsoft announced the Activision bid last January, its biggest ever, to take on leaders Tencent ( 0700.HK ) and Sony ( 6758.T ) in the booming video games market and to venture into the metaverse that is virtual online worlds where people can work, play and socialize.

The European Commission, which is scheduled to rule on the deal by April 25, is not expected to require Microsoft to sell assets to gain approval, the people said.

In addition to the licensing agreements for rivals, Microsoft may also have to offer other behavioral solutions to assuage the concerns of parties other than Sony, one of the people said. Such remedies typically refer to the merged company’s future conduct.

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

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

Smith said it was not possible or realistic to believe that one game or part of Activision could be carved out and separated from the rest.

The EU’s competition regulator declined to comment.

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

“Our commitment to provide long-term 100% equal access to Call of Duty to Sony, Steam, NVIDIA and others preserves the agreement’s benefits for players and developers and increases competition in the marketplace,” a Microsoft spokesperson said.

Last month, Microsoft said it had signed 10-year licensing deals with Nintendo ( 7974.T ) and Nvidia ( NVDA.O ) that will bring Call of Duty to their gaming platforms, with the deals contingent on the green light for the Activision deal.

The deal faces regulatory headwinds in the UK, where the UK Competition Bureau 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.

Reporting by Foo Yun Chee; Editing by Hugh Lawson, Elaine Hardcastle, Jane Merriman and Marguerita Choy

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