Activision Blizzard Purchase Faces Another Hurdle as the EU Reportedly Objects to the Deal

Activision Blizzard, the US-based media and entertainment company, is facing yet another hurdle in their newest acquisition. The European Union (EU) has reportedly objected to Activision Blizzard’s purchase of their competitor, King Digital Entertainment. This could put a stop to Activision Blizzard’s largest ever purchase and complicate their future development plans.

Activision Blizzard announced their agreement to acquire King Digital Entertainment back in February 2015. Activation Blizzard, the makers of popular video game franchises like Call of Duty and World of Warcraft, said they were paying $5.9 billion to acquire King Digital Entertainment, who is best known for developing the casual mobile game Candy Crush Saga. However, the EU has now reportedly voiced objection to the deal.

The EU’s primary concern is whether or not Activision Blizzard’s acquisition of King hinders competition within the video game market. The EU does have the power to review merger and acquisition deals for competition considerations. They have the authority to block any deal that they believe will reduce consumer choice or foster anti-competitive practices within a particular sector. If the EU blocks Activision Blizzard’s acquisition of King Digital Entertainment, it would be a major blow to the company.

The EU is also reportedly concerned about Activision Blizzard’s close ties with other companies. Activation Blizzard is a subsidiary of Vivendi, a French media conglomerate, and their parent company, Activision Blizzard, currently holds exclusive distribution rights to the popular mobile game, Clash of Clans.

If the EU does block Activision Blizzard’s acquisition of King Digital Entertainment, the company could look to appeal the decision with the European Commission’s Mergers and Acquisitions (M&A) Regulation. However, this is a lengthy process that could cause significant delays.

At this stage it is uncertain as to whether or not the EU will block Activision Blizzard’s acquisition of King Digital Entertainment. However, it is clear that the EU’s objections could be a major road block for the company. If Activision Blizzard’s acquisition is indeed blocked, it could force the company to go back to the drawing board and rethink their future plans.