U.K. Antitrust Watchdog Opens Inquiry Into Planned Microsoft-Activision Merger

July 7, 2022

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Microsoft Intrinsic Value – The U.K.’s antitrust regulatory has opened an inquiry into Microsoft’s ($NASDAQ:MSFT) planned $69B acquisition of Activision Blizzard to see if it will impact rivals. The Competition and Markets Authority (CMA) is inviting the public to comment on the deal and expects that period to end on July 20. The regulatory agency also said it expects an initial deadline of Sept. 1 to see if it will conduct a further, in-depth investigation of the deal. Other regulatory bodies around the world, including the Federal Trade Commission, are also examining the deal. The CMA’s inquiry is just one of many hurdles that Microsoft and Activision Blizzard will have to clear before the deal can be completed. It’s still unclear if the deal will ultimately be approved by regulators, but if it is, it could have a big impact on the video game industry. The combined company would control a large portion of the market for console and PC games, as well as a significant number of the most popular game franchises. The deal could also have a major impact on Microsoft’s bottom line. Activision Blizzard is a very profitable company, and the acquisition would make Microsoft one of the largest players in the video game industry. The deal could help Microsoft offset some of the decline that it has seen in its other businesses, such as its consumer electronics and personal computing businesses. It’s still too early to say definitively how the CMA’s inquiry will affect Microsoft and the planned merger. However, it’s clear that the deal is facing significant scrutiny from regulators. It’s possible that the CMA’s inquiry could delay or even scuttle the deal, but it’s also possible that the CMA could ultimately approve the deal with some conditions attached. We’ll have to wait and see how the CMA’s inquiry progresses in the coming months.

Market Reaction

The current media exposure to MICROSOFT stock is mostly positive. On Wednesday, MICROSOFT stock opened at $263.8 and closed at $266.2, up by 1.3% from the prior closing price of $262.8. This indicates that investors are confident in the company’s future despite the recent media coverage.

VI Analysis – Microsoft Intrinsic Value

Companies with strong fundamentals tend to have a long-term potential for growth. The below analysis on Microsoft’s fundamentals is made simple using the VI app. The VI Star Chart shows that Microsoft is strong in profitability, growth, dividend, and medium in asset. Microsoft has a high health score of 8/10 considering its cashflows and debt, indicating that it is capable of sustaining future operations in times of crisis. Microsoft is classified as a ‘gorilla’, a type of company that has achieved stable and high revenue or earnings growth due to its strong competitive advantage. At the right price, it is suitable for investors who are looking for high capital gains. However, high growth companies are deemed more risky as they attempt to grow faster. VI App calculates Microsoft Intrinsic Value, which is shown here below the star chart.

microsoft intrinsic value


The Competition and Markets Authority (CMA) is investigating whether the deal, announced last month, would reduce competition in the market for video game consoles and publishing. Microsoft and Activision said they are “cooperating fully” with the CMA’s inquiry. “We believe the combination of Microsoft and Activision Blizzard will benefit gamers, developers and publishers alike, and we look forward to continuing to work with the CMA as their review progresses,” the companies said in a joint statement. The CMA’s inquiry is the latest regulatory hurdle for the proposed merger, which still needs approval from antitrust authorities in the U.S. and Europe. The stock price of Microsoft Corp.oration (MSFT) was up 1.3% on Friday, following the news of the CMA’s inquiry. Analysts believe that the deal is likely to go through, despite the regulatory hurdles. The combined company would be a powerhouse in the gaming industry, with a large portfolio of popular franchises. Microsoft is a sound investment at this time, due to its strong financial position and prospects for growth. The proposed merger with Activision would further solidify its position in the gaming industry.

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