Microsoft’s proposed multi-billion dollar acquisition of video game publisher Activision Blizzard has cleared another major hurdle as the U.S. Federal Trade Commission (FTC) officially withdrew its case against the deal on Thursday. The FTC, which had been pursuing a two-pronged attack against the transaction, had requested a preliminary injunction on the $69 billion acquisition which was denied last week.
According to Reuters, an appeals court also turned down the FTC’s request for an emergency hold on the deal, leading the agency to make the decision to withdraw its administrative challenge. While the deal has cleared another major obstacle, Microsoft and Activision have yet to close the acquisition and it could still take some time before it is completed.
The primary opposition to the deal came from the FTC, despite the fact that the agency’s request for an injunction was denied by a federal judge. Microsoft and Activision made a joint motion which was posted on the FTC’s website Wednesday, arguing that withdrawing the agency’s case was both mandatory and in the public interest.
“The district court had a full opportunity to consider the FTC’s claims and found that the Commission was unlikely to succeed on the merits of those claims for multiple, independently sufficient reasons,” the companies said in their motion.
Despite the setback, Microsoft is still confident of completing the acquisition as Xbox head Phil Spencer told employees that the two companies “remain optimistic that we will get our acquisition over the finish line.” Microsoft is currently negotiating with the UK’s Competition and Markets Authority (CMA) as part of its approval process, while also having to satisfy the European Commission’s Merger Review timetable.
The primary purpose of the deal is to enable Microsoft to integrate its game streaming service, xCloud, with Activision’s game portfolio. It’s also believed that the acquisition will provide the Xbox team with the resources necessary to build a competing ecosystem to Apple’s and Google’s dominant gaming offerings.
Although the lawsuit has been dropped, the FTC could re-file this administrative challenge. For the moment, however, it appears as if the deal is on track to completion. After a lengthy approval process, it’s now a matter of time before Microsoft and Activision Blizzard finalize their deal and move forward.