Activision Shares Edge Lower as U.K. Competition Watchdog Probes Microsoft Merger

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Activision Shares Edge Lower as U.K. Competition Watchdog Probes Microsoft Merger

By Scott Kanowsky -- Shares in Activision Blizzard (NASDAQ: ATVI ) edged lower in early U.S. trading on Wednesday, after Britain's competition watchdog launched an investigation into Microsoft's (NASDAQ: MSFT ) planned multi-billion dollar purchase of the video game maker.

The U.K. Competition and Markets Authority (CMA) said in a statement that it is concerned the merger would create a "substantial lessening" of potential rivals in British markets. The CMA added that it hopes to have an initial decision on the agreement by September 1.

The CMA has also invited comments on the transaction from "any interested party."

In January, Microsoft agreed to a $75B purchase of Activision, the gaming company behind mega-hits like "World of Warcraft" and "Call of Duty," in the technology giant's largest-ever deal. Microsoft also valued Activision at $68.7B.

The agreement came amid a run of consolidation in the gaming industry, spurred on by technology firms eager to gain an edge in the race to develop platforms in the so-called "metaverse" - a name for virtual worlds seen as a potentially lucrative innovation in digital entertainment.

Other high-profile dealmaking includes a $12.7B merger between "Grand Theft Auto" maker Take-Two Interactive (NASDAQ: TTWO ) and rival Zynga, as well as a $13B tie-up of Flutter Entertainment (OTC: PDYPY ) - the parent of Paddy Power Betfair and FanDuel - and gambling company The Stars Group.

Shares in Microsoft were trading slightly higher in early U.S. deals following the CMA's announcement.

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