The UK Competition and Markets Authority (CMA) blocked the purchase of Activision Blizzard, and many believe that Microsoft has no alternative to complete the agreement. However, analyst firm DFC Intelligence thinks otherwise, as it believes that the company still has a chance to close the acquisition.
Nevertheless, they warn that the process will not be simple or short, and there is a possibility that Microsoft may decide to walk away from the purchase. This is because the CMA and other regulators will likely increase their demands. Therefore, Microsoft would have to make many more concessions.
According to DFC Intelligence, the CMA now has an open door to demand more from Microsoft. The company believes that the tech giant can only come out victorious if it commits to giving up more ground.
However, this is a double-edged sword, as regulators could demand so many concessions that Microsoft may lose interest in the purchase altogether. For this reason, they believe it will be a prolonged legal battle, and negotiations are likely to continue until 2024, at least in the case of the CMA.
"DFC Intelligence believes that the deal will go through as long as Microsoft is willing to make some more concessions to appease regulators. But at what point does compromise eliminate strategic objectives for making the acquisition in the first place?
"An acceptable remedy for the CMA would likely limit Microsoft's ability to use Game Pass as an entryway to other services. There will be some point where Microsoft will walk away rather than commit," the analyst firm said.
At the end of May, the European Commission will announce its verdict on the case. This will be crucial for the future of the acquisition, which will still have to face opposition from the US Federal Trade Commission (FTC).
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