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Microsoft-Activision merger faces UK antitrust probe

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Yahoo Finance Live anchors discuss the rocky road ahead for Microsoft's acquisition of Activision.

Video Transcript

[MUSIC PLAYING]

BRIAN SOZZI: Welcome back. We're a few minutes away from that opening bell on Wall Street, but let's start with some movers, or I would say, stocks of interest here on the Yahoo Finance platform. First up, Brad, it is Microsoft. The UK's Competition and Markets Authority has announced a formal investigation into this proposed $68.7 billion deal.

Look, I don't think investors thought this deal was going to be completed overnight and wouldn't have some rocky roads to getting this one done. So does Microsoft clearly have to address this at some point and likely very soon.

BRAD SMITH: Really, and it's the international reach here of Microsoft as well that they have to take into consideration. With the number of different regions that they do operate in internationally, there are so many different regulators that also need to still approve the deal and give this kind of the green check mark, if you will. And it's interesting that the Competition and Markets Authority in the UK is considering whether the deal could harm competition and lead to worse outcomes for consumers.

And particularly in those consumer protections, they're going to look across things, including quality, pricing, and even the amount of choices that consumers have. And that's typical of what we would see for consumer protection agencies, not just in the UK, here in the US as well here.

And so it looks like that there's going to be a September 1st deadline for a decision to come on first glance here. And so that particularly is something to look out for. Mark your calendars for September 1st. Perhaps we'll have even more movement for both MSFT and ATVI as they look to really shore up this deal here.

BRIAN SOZZI: Yeah, if one is a Microsoft shareholder, I would argue, Brad, the more-- the bigger concern is how earnings will shape up for this company when they are reported in a few weeks. Microsoft shares, I'm on the Yahoo Finance platform now, are down 23% year-to-date.

Now not as-- it is relatively outperforming the NASDAQ composite. And of course, the biggest big plunges in the likes of Meta and Netflix, but still we've seen-- start to see some weakness in PC demand. We saw a weakness in chip demand over at Micron with its earnings last week. And you have to think, well, is Microsoft fully immune from these slowdowns? The answer is probably not.

BRAD SMITH: Probably not. And it's not just the demand, it's also the supply chain crunch, especially in some of those consumer tech products as well. And that's in everything from gaming and the consoles there, all the way through to some of the HP-- or not HP, but some of the PC rather. That's the kind of corollary and common denominator of the PC environment here.