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Microsoft’s acquisition of Skype for $8.5 billion gets approved in the EU

It’s taken just under five months, but for the biggest acquisition in the company’s history, Microsoft’s 8.5 billion dollar deal has finally gotten the green light.

Skype Technologies SA was previously under split ownership, with eBay buying up 30% of the company in 2005 and the remainder spread amongst tech investors. Microsoft stepped up back in May of this year, looking to buy up all the shares for that hefty $8.5 billion price tag.

It is undoubtedly an over-the-top amount to have paid, but Microsoft have needed to expand their online services portfolio for some time now and with competitors like Facebook and Google looking at the potential of acquiring such a company, Microsoft had little time to lose.

The FTC approved the acquisition under U.S. regulatory practises back in June, but until now the deal couldn’t complete without EU confirmation as well. This, however was the statement that came from the European Commision, earlier this week,

‘The European Commission has cleared under the EU Merger Regulation the proposed acquisition of the Internet voice and video communication provider Skype by Microsoft Corporation because the deal would not significantly impede effective competition in the European Economic Area (EEA) 1 or any substantial part of it.

In the area of consumer communications, the investigation found that the parties’ activities mainly overlap for video communications, where Microsoft is active through its Windows Live Messenger. However, the Commission considers that there are no competition concerns in this growing market where numerous players, including Google, are present.

For enterprise communications, the investigation confirmed that Skype has a limited market presence for these products and does not compete directly with Microsoft’s enterprise communication product Lync, which is used mostly by large enterprises.

The Commission’s investigation also focused on possible conglomerate effects, since Skype and Microsoft are active in neighbouring markets.

The transaction was notified to the Commission for regulatory clearance in the EEA on 2 September 2011.’

Skype’s chief exec, Tony Bates will now become president of the Microsoft Skype Division and report directly to head honcho and CEO of Microsoft, Steve Ballmer.

What Microsoft intend to do with Skype is uncertain, for now they will leave well alone, with of course better integration of Skype services coming to Windows, Windows Phone, Xbox and other MS products. Beyond that however, we can’t be sure.

What do you think, does this acquisition hold real potential for the company to build on, or was the high price tag just that? Leave your thoughts in the comments.



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