eli5 What happenes if EU or UK regulators block MS x ABK merge?


I mean countries like Brazil, Chile or Saudi Arabia approved the deal, what happenes to their decisions?

In: 1

They have to get approval from every country they operate in. If they don’t get approval, they can’t operate in that country. So either they remove all operations from the UK and/or EU, or they don’t merge.

If a government (either national or supranational) chooses to legislate against the merging of any two foreign companies, the merger can still go ahead. However, it is generally expected that such a move would prohibit future access to that country/region’s market.

In this scenario, both the EU and UK are big markets for both gaming and technology products/services (which are the bread & butter of ABK and Microsoft, respectively). Therefore, it’s unlikely that these companies would choose to pull out of these markets to push forward with a merger.

That being said, it’s not certain that an EU and/or UK blockade on the merger would do very much at all. Massive international companies like Microsoft & ABK operate child companies in countries they have a significant interest in ([Microsoft](https://find-and-update.company-information.service.gov.uk/search?q=Microsoft) and [ABK](https://find-and-update.company-information.service.gov.uk/search?q=Activision+Blizzard+King) each operate several in the UK alone). It might be possible that they could continue local operations unimpeded through these unmerged local companies as a sort of legal loophole.

All of this is hypothetical, of course. Should the EU or UK want to block the merge badly enough, there are all manner of legal, economic and diplomatic instruments they could employ to apply pressure to the companies to abandon their merge of their own accord.