A “fragile” UK government could miss a post-Brexit opportunity to attract thousands of jobs if it blocks Microsoft’s $75bn acquisition of Activision Blizzard, the head of the video game maker said as the deal awaits regulatory approval.
Bobby Kotick, the Activision chief executive who is trying to get the deal through competition authorities in the UK, the EU and the US, expressed concern that “ideologues” were taking over the agencies, during an interview with the Financial Times in which he also accused Sony of “trying to sabotage” Microsoft’s takeover.
The UK Competition and Markets Authority is expected to soon deliver a preliminary verdict on whether the deal raises competition concerns. The US Federal Trade Commission in December sued to halt Microsoft’s Activision acquisition. Lina Khan, the commission’s Biden-appointed chair, has zealously attacked Big Tech mergers and acquisitions.
The CMA “seem like they’ve been co-opted by the FTC ideology, and [are] not really using independent thought, or thinking about how this transaction would positively impact the UK”, Kotick said. He contrasted this with the EU, where he said regulators had shown “a lot more insight and recognition of what the risks are in the economy from a macro perspective”.
If it goes through, the Activision deal would be Microsoft’s largest acquisition and make it the third-biggest gaming company by revenue, behind China’s Tencent and Japan’s Sony.
UK prime minister Rishi Sunak is “smart” and “understands business”, Kotick said. But “it doesn’t seem like there is any real vision in the leadership for pursuing these kinds of opportunities”, he said, adding: “It seems like a bit of a fragile government. Where’s the leadership?”
“If I look at our hiring plans, we’re more likely to find the next 3,000 to 5,000 people that we need in the UK than almost any other country,” Kotick said.
On Tuesday, Activision’s stock rallied 5.6 per cent to close at $75.60 following an earnings report on Monday. But it is still trading at a substantial discount to the $95 per share value of Microsoft’s offer.
Kotick also lashed out at Sony, which has accused Microsoft of misleading regulators about its commitments to keep Call of Duty on PlayStation consoles following its Activision acquisition. Activision offers its games to Sony’s PlayStation console and this deal is about to expire, Kotick said.
PlayStation competes with Microsoft’s Xbox. After the Activision acquisition was announced, Sony’s shares fell 13 per cent.
“Suddenly, Sony’s entire leadership team stopped talking to anyone at Microsoft,” Kotick said, adding that his own calls to Sony’s chief and other executives were not returned.
“I think this is all Sony just trying to sabotage the transaction,” Kotick said. “The whole idea that we are not going to support a PlayStation or that Microsoft would not support the PlayStation, it is absurd.”
In response to a request for comment, Sony said: “We are in contact with Microsoft and have no further comment regarding our private negotiations.”
Kotick was optimistic the Microsoft acquisition would close by July 2023. In its fight with the FTC, Kotick noted that Microsoft had hired Beth Wilkinson, a Washington-based lawyer who was hired by the commission in 2012 to lead a probe into Google.
“She feels like if she is going to have to litigate against the FTC, she will absolutely crush them.”