U.K. Watchdog Blocks Microsoft’s Bid to Buy Activision

Microsoft’s video game bet takes a big hit

UK mergers regulators blocked Microsoft’s $69 billion takeover offer for Activision Blizzard on Wednesday, and buying the maker of ‘Call of Duty’ could end the tech giant’s thriving market for cloud-based video games. I decided that I had too much control.

decision It surprised many investors after the Competition and Markets Bureau focused its investigation earlier this month — Activision’s move, which poses a serious obstacle to trading and has already faced opposition from the FTC and is under scrutiny by the EU. While the stock fell 12% before the market, Microsoft’s stock rose nearly 8% on the solid earnings report.

The deal risks “destroying the innovation” happening in cloud gaming. By giving Microsoft, which owns the Xbox platform, control over popular game titles, the CMA said: (Cloud gaming doesn’t rely on users owning expensive consoles.) Regulators aren’t swayed by the promises of Microsoft (which accounts for up to 70% of cloud gaming) and rivals such as Sony and Nintendo. gives access to their top games. .

Combining Microsoft and Activision could lead to higher prices and fewer choices for consumers, the regulator concludes. Martin Coleman, who chaired the panel that investigated the CMA, said in a statement:

Microsoft promises to move forward, President Brad Smith said the company will appeal. “This decision appears to reflect an erroneous understanding of how this market and related cloud technologies actually work,” he said in a statement.

The company’s executives and investors were encouraged by the CMA’s decision a few weeks ago to focus solely on cloud gaming concerns, rather than looking at the broader issue of console competition.

However, the road to completing the contract became more and more difficult. Microsoft will find it difficult to seal the acquisition without approval in the UK, which has a sizable video game market. Moreover, appealing a decision by the CMA must meet high standards, as the regulator primarily considers whether it acted reasonably and lawfully.

Meanwhile, the European Commission is expected to issue a ruling on the takeover by May 22nd.

Then there’s the issue of timing. Microsoft previously set a July 18th deadline to close the deal.

this is what is happening

Consumer-facing businesses are doing well despite inflation. Quarterly sales results Prices from the likes of Nestle and PepsiCo have largely held up after double-digit percentage increases over the past year. But business leaders are concerned about consumer backlash. start to reduce Additional menu items such as French fries.

Neil Gorsuch’s property sale raises new ethical concerns. Concerns about the justices’ financial entanglements were further heightened when it was revealed that a Supreme Court justice had sold a vacation property to the director of Greenberg Traurig, a leading law firm that handles litigation in court.Senators introduce bill request a code of ethics Chief Justice John Roberts has refused to testify before Congress.

GM will stop selling Volt electric vehicles. The automaker said it will end production of models that accounted for nearly all of the 20,000 EVs sold in the U.S. in the first quarter, in favor of new electric SUVs and trucks. GM also reported that quarterly earnings he fell 18.5%. This is partly due to declining sales in China. His BYD, a Chinese automaker backed by Warren Buffett, best selling brands out there.

Citigroup’s top banker leaves after affair with Jeffrey Epstein comes to light of Leaving Paul BarrettA senior leader at Citi’s private bank, the Wall Street Journal reported that he met with a convicted sex offender while working for JPMorgan Chase, even after the bank cut ties with Epstein. I came later.

Is Ken Griffin curbing his enthusiasm for Ron DeSantis? The hedge fund billionaire has been plagued by recent moves by the governor of Florida, including DeSantis’ downplaying Russia’s invasion of Ukraine and the state’s latest ban on abortion after six weeks.

Free Fall of the First Republic

First Republic shares closed down nearly 50% on Tuesday as investors digested dismal earnings reports that revealed that clients withdrew $102 billion from banks in the first quarter. Lenders in the region are considering numerous options to strengthen themselves, including the sale of up to $100 billion in assets. But selling comes at a cost. First Republic would have to post unrealized losses on its balance sheet, which could hurt its already shrinking capital.

Investors are worried about bank funding costs. It borrowed about $92 billion from government lending groups such as the Federal Reserve Bank and the Federal Mortgage Bank. The problem is that loans cost more than customer deposits, and banks cannot use the funds for their business as they can for customer deposits.

Advisors to First Republic are reportedly planning to put pressure on banks that already provide a $30 billion lifeline. make a choiceaccording to CNBC: either buy bonds from lenders at above-market rates and suffer losses in the single digits, or face $30 billion in FDIC fees if First Republic fails.

Policy makers are watching closely. “You can rest assured that regulators are deeply involved in monitoring the situation and are taking necessary steps,” said White House Chief of Staff Jeff Zientz. told the Wall Street Journal Without naming any particular bank after the earnings call. But the government has yet to do what the First Republic wants.

Things can get worse before they get better. Deposit outflows have stabilized, but analysts say Tuesday’s plunge in stocks could spur further gains. “It seems like there’s a good chance they’ll mess up,” Autonomous Research’s David Smith told his DealBook before First Republic reported earnings. “I think the concern now is that the deposit situation is much worse than people feared, which could lead to another outflow of funds.”

Can McCarthy Avoid Debt Limitation ‘Chaos’?

House Speaker Kevin McCarthy has vowed to hold a vote as early as Wednesday on a bill to remove the Republican debt ceiling, but party support for the measure is still uncertain.

Time is of the essence. “The debt ceiling is now at the center of the forefront. Lawmakers have less time than expected.” Moody’s Chief Economist Mark Zandy told DealBook: Zandy and other economists predict the US could hit the debt ceiling as early as early June. According to Zandi, this will further increase the pressure to reach a speedy legislative resolution.

“Our default will cause economic and financial catastrophe.” Treasury Secretary Janet Yellen said: in Tuesday’s speechYellen predicted that borrowing costs would rise, along with auto, mortgage and credit card payments, if no deal could be reached. She also said military and social security payments would stop and credit markets would worsen. She called on Congress to unconditionally raise limits or suspend them. said Yellen.

Still, about 10 Republicans reportedly oppose Mr McCarthy’s bill Some are calling for work requirements related to federal subsidies while rolling back clean energy tax credits.

Even if McCarthy succeeds in passing the bill, President Biden threatened on Tuesday to veto it if it got to his desk. Zandi said the impasse raises the possibility of emergency measures to temporarily suspend the debt ceiling for several weeks. “They will likely kick the can and push the liquidation date back to September.”

“Show me the schools I closed, show me the factories I closed. Never. I made decisions based on that.”

— Dr. Anthony FauciIn a lengthy interview with The New York Times Magazine, the former US public health official opened up about the country’s response to the coronavirus pandemic, the heavy criticism he received, and lessons learned.

Bud lights appear red

When Anheuser-Busch InBev reports its quarterly results next week, Brewer CEO Michel Doukeris may face the toughest questions yet about the company’s deepening US problems.

AB InBev said Tuesday it was attended by two senior executives. leave of absence, The world’s largest brewer is trying to put a lid on controversy that erupted this month over Bud Light’s social media campaign featuring transgender influencer Dylan Mulvaney.

The backlash was swift. Bud Light’s sales are plunging amid calls for a boycott from conservative lawmakers and celebrities. Florida Governor Ron DeSantis, who has also made a habit of attacking companies that don’t agree with his politics, said, “It’s part of the larger thing American corporations are trying to change in this country.” rice field.

AB InBev is the latest consumer brand to be caught in America’s culture wars. Potential Republican presidential nominee DeSantis also feuded with Disney after Disney criticized the state’s so-called “don’t say gay” laws.

Sales were already slow in North America. The region was the worst market for AB In Bev beer sales by volume, with Bud Light sales declining. “This will only steepen the curve of decline” Harry Schumacher, The publisher of Beer Business Daily told The Times.

Mr. Doukeris is largely silent. Before the controversy erupted, he told the Financial Times: Avoid Polarization Problems And it didn’t have to be that the company was “out there and talking about everything.” made a statement I tried to shift my focus from politics to beer.

And the company has set aside Alyssa Heinerscheid, vice president of marketing for Bud Light, and Daniel Blake, who oversees marketing for Anheuser-Busch’s mainstream brands.

speed lead

bargain

• Getty Images Rejected He said a $4 billion takeover offer from activist investor Trillium Capital was not “credible enough.” (Bloomberg)

• Binance.US Canceled $1.3 billion deal For the assets of bankrupt crypto lender Voyager Digital. (Reuters)

• agreed to make an effort Sell ​​IMG Academysold , a for-profit boarding school for promising young athletes, to investment firm BPEA EQT at a valuation of $1.25 billion. (WSJ)

policy

best of the rest

• Presented by hedge fund mogul Ken Griffin $25 million for Success Academy, New York’s largest charter school operator. (Bloomberg)

• “50 year old black scholes: How Option Pricing Models Changed Finance” (FT)

• Xerox is donating parcis the research center that gave rise to the modern PC, graphical user interface, and mouse to the non-profit organization SRI International. (quartz)

• The story of GameStop mania become a movieSeth Rogen played hedge fund manager Gabe Plotkin and Paul Dano played memestock influencer Keith Gill. (insider)

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