Microsoft and Activision say they will appeal merger obstruction

Both Activision and Microsoft have issued statements saying they will appeal the decision by a UK watchdog to block their planned merger.

Earlier today, the UK Competitions and Markets Authority announced that it had "prevented" the deal "over concerns that the deal would damage competition in the Cloud Gaming market."

In a statement issued to GamesRadar+, Microsoft's vice chair and president, Brad Smith, said that "we remain fully committed to this acquisition and will appeal." Smith states that "the CMA’s decision rejects a pragmatic path to address competition concerns and discourages technology innovation and investment in the United Kingdom," and draws attention to the multiple cloud gaming partnerships Microsoft has struck in recent months.

In a statement provided by an Activision spokesperson, the publisher said that "The CMA’s report contradicts the ambitions of the UK to become an attractive country to build technology businesses. We will work aggressively with Microsoft to reverse this on appeal. The report’s conclusions are a disservice to UK citizens, who face increasingly dire economic prospects. We will reassess our growth plans for the UK. Global innovators large and small will take note that - despite all its rhetoric - the UK is clearly closed for business."

In a message sent to staff, Activision CEO Bobby Kotick - who will reportedly remain in-post if the deal fails - repeated that "we can and will contest this decision," stating that "we've already begun the work to appeal to the UK Competition Appeals Tribunal."

The CMA's decision puts a significant roadblock in front of Microsoft's attempt to purchase Activision, despite the company's confidence in recent days. It's unclear how long an appeal process would last, but it means that the original goal of finalising the deal by the summer now seems very unlikely.

Confused? Here's the Xbox Activision deal explained.