FirstFT: Microsoft-Sony truce paves way to clinch $75bn Activision deal

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Good morning. Microsoft has moved a step closer to sealing its contentious $75bn purchase of Activision Blizzard with the announcement that arch-rival Sony has signed a licence for the games company’s most popular title, Call of Duty, after the deal is completed.

The agreement signalled a truce between the two gaming giants after a bruising 18-month battle that had seen the Japanese company become the biggest opponent to the acquisition. It follows regulatory breakthroughs for Microsoft on both sides of the Atlantic last week that have left it on brink of clinching victory for a deal that is expected to reshape the gaming industry.

The pact appeared to resolve Sony’s biggest complaint about the acquisition, which it has said would hurt competition by giving Microsoft the power to make Call of Duty exclusive to its own Xbox game console and other services.

The weekend agreement followed the failure late on Friday of a last-ditch legal attempt by US regulators to prevent the deal from closing.

Phil Spencer, head of Microsoft’s Xbox gaming division, said on Twitter that the companies had signed “a binding agreement to keep Call of Duty on PlayStation following the acquisition”. Sony later confirmed the new licence, though both sides refused to give further details.

Here’s what else I’m keeping tabs on today:

China GDP: The world’s second-largest economy publishes its second-quarter gross domestic product growth data. Economists will be closely watching for clues about the underlying health of China’s economy as it struggles to recover from strict Covid controls last year.
John Kerry in Beijing: The US climate envoy is visiting China to restart stalled negotiations over global warming between the world’s two largest polluters.
Dyson lawsuit: London’s High Court will hear forced-labour claims against Dyson by 23 migrant workers and the estate of one deceased employee at the vacuum cleaner manufacturer’s Johor factory in Malaysia.
Japan: Financial markets are closed for Marine Day.

Five more top stories

1. Top Biden administration officials have dimmed hopes of an immediate easing of tariffs against China. US Treasury secretary Janet Yellen said she was eager to work more closely with Beijing on areas of “mutual concern”, but that it is “premature” to relax trade restrictions. National security adviser Jake Sullivan called China’s move to impose export controls on two metals critical to semiconductors “self-defeating.”

2. Moscow has taken control of the Russian subsidiaries of Danone and of Carlsberg’s Baltika Breweries, according to a decree signed into law by President Vladimir Putin. The move marks the first time that Russia has seized the subsidiaries of western businesses since it took over Finland’s Fortum and Germany’s Uniper in April. Read more on the Russian confiscations.

3. Exclusive: Czech billionaire Daniel Křetínský is poised to win the battle for control of Casino after a trio of investors led by billionaire Xavier Niel dropped out of the running to bail out the heavily-indebted French food retailer. Křetínský told the FT that he had submitted a revised offer to Casino as part of the company’s voluntary debt restructuring negotiation with creditors. Here’s what Křetínský’s new offer would mean for Casino.

4. “Rats” is how Hong Kong leader John Lee has taken to referring to a group of eight pro-democracy activists with a combined bounty of $1mn on their heads. Meanwhile, Lee is also the jovial face of a “Hello Hong Kong” government campaign drawing international visitors. Here’s why Lee’s hard line stance could hinder attempts to restore confidence in Hong Kong’s financial hub status.

5. UBS executives have chosen EY for one of the world’s most lucrative banking audit contracts after deciding to retain the Big Four firm following its takeover of Credit Suisse. The size of the contract means EY will have to call in staff from other countries to work on the audit, two people said. Read the full story.

News in-depth

Global companies are racing to decouple China data in response to the country’s increasingly stringent data and anti-espionage laws, as relations between Washington and Beijing deteriorate. Here’s what “concerned” multinationals are doing to hive off their systems.

We’re also reading . . .

Wimbledon: Young Spanish tennis star Carlos Alcaraz defeated Novak Djokovic in an epic five-set battle to win his first Wimbledon men’s title.
Hollywood strike: Writers and actors are picketing together in the industry’s biggest strike in 60 years as they protest against reduced pay in the streaming era and the threat of AI.
Adam Posen: The economist warns about the flaws of the Inflation Reduction Act and viewing industrial competition as a zero-sum game. Read the full interview.
Anti-social social media: Apps such as Mark Zuckerberg’s Threads are a stage for brands and celebrities, not a network for friends to connect, writes Elaine Moore.

Chart of the day

Line chart of TL/litre* showing Turkish petrol prices jump

Turkey has tripled petrol taxes as the government tries to raise money to recoup the cost of huge giveaways ahead of May’s election and fund reconstruction costing up to $100bn after February’s devastating earthquake. The increase pushed up petrol prices at the pump by about 20 per cent, data from state oil company Turkish Petroleum showed.

Take a break from the news

Everyone complains about tourists. But following the pandemic, international travel is reviving unexpectedly fast and complaints about overcrowding and cultural insensitivity are getting louder. Now some destinations are trying to repel tourists.