Microsoft’s Activision Deal Provisionally Approved. What Happens Next.

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Microsoft
’s
$75 billion acquisition of

Activision Blizzard

took a major step toward being completed Friday after U.K. regulators said a new restructured deal substantially addresses its concerns over cloud gaming.

The U.K.’s Competition and Markets Authority blocked the original deal earlier this year to “protect innovation and choice in cloud gaming.” As a result

Microsoft

(ticker: MSFT) put forward a revised deal in which it would sell the non-European streaming rights to Activision (ATVI) games to Assassin’s Creed publisher

Ubisoft
.
 

The CMA said the sale to French videogame maker

Ubisoft

(UBI.Paris) prevented important Activision content, such as Call of Duty and World of Warcraft games, from coming under the control of Microsoft, which it said could have stifled competition and reinforced the company’s strong position in cloud gaming services.

“The new deal instead results in the cloud streaming rights for Activision’s games being transferred to an independent player, Ubisoft, maintaining open competition as the market for cloud gaming develops over the coming years,” the regulator said.

Microsoft stock rose 0.5% ahead of the open Friday, while Activision’s shares pointed 1.8% higher. Ubisoft stock climbed 3.6% in early European trading.

Microsoft has reached a number of agreements in a bid to complete the merger, including a10-year deal with

Sony

(SONY) to keep Activision’s Call of Duty games on its PlayStation consoles. Separately, the European Commission required Microsoft to license Activision’s games to competing cloud gaming services, as part of its approval.

It’s not quite a done deal yet, though. Microsoft has put forward remedies to address residual concerns raised by the CMA, which regulators will now consult on until Oct.6. But it does now seem likely that the merger is completed ahead of the companies’ own merger deadline of Oct.18.

Write to Callum Keown at callum.keown@barrons.com