More countries approve Microsoft's acquisition of Activision Blizzard! Wall Street should be more optimistic

Wall Street seems to believe that Microsoft's $69 billion acquisition of Activision Blizzard is facing a tough regulatory battle in the UK, but an analyst at Macquarie believes that approval from Europe and Japan will help clear the way for the deal's completion.

Although Microsoft has received approval in various countries, it has yet to convince the UK Competition and Markets Authority (CMA) and the US Federal Trade Commission (FTC).

More countries approve Microsoft's acquisition of Activision Blizzard

Recently, a Microsoft spokesperson revealed that the company's $69 billion acquisition of gaming company Activision Blizzard has received unconditional approval from China's antitrust agency.

Macquarie analyst Sarah Hindlian-Bowler said that Microsoft's acquisition of Activision Blizzard has received further support.

Microsoft said: "The acquisition of Activision Blizzard has now been approved in 37 countries/regions, including all 27 EU member states, as well as Japan and Brazil, among 10 other countries, covering over 2 billion people. This acquisition, combined with our recent commitments to the European Commission, will enable global consumers to play more games on more devices."

The US Federal Trade Commission (FTC) and Microsoft representatives in the UK said that Microsoft has appealed the decision by the UK Competition and Markets Authority (CMA) to block the deal. The CMA expressed concern about how Activision Blizzard's content would affect competition in the cloud business, in which Microsoft has an advantage.

Wall Street is divided

Wall Street believes that Microsoft is likely to achieve this goal, as can be seen from the difference between Activision Blizzard's current stock price and the $95 per share transaction price. Analysts at Wedbush are even more optimistic.

She wrote: "Further approvals from more countries further demonstrate the consensus among the world's major economies that this transaction does not pose a threat to consumers and should therefore proceed." "Therefore, we believe that the CMA's opposition is fundamentally less in line with the consensus, which could reduce its relevance to the final outcome."

She believes that obstacles still exist, but the latest approvals have "created a clearer path to the end of negotiations." She is not the only analyst with this optimistic view.

Wedbush analysts have set a target price of $95 for Activision Blizzard and given it an outperform rating, but they believe that as an independent company, Activision's stock is worth this much. They wrote: "We believe that if the CMA does not clarify this before defending its ruling in court, Microsoft's appeal against the CMA's ruling will ultimately result in a ruling in favor of Microsoft."