EU antitrust ruling on Microsoft buy of GitHub due by 19 October

EU antitrust regulators will decide by 19 October whether to clear US software giant Microsoft’s $7.5 billion acquisition of privately held coding website GitHub.

Microsoft, which wants to acquire the firm to reinforce its cloud computing business against rival Amazon, requested European Union approval for the deal last Friday, a filing on the European Commission website showed on Monday.

The EU competition enforcer can either give the green light with or without demanding concessions, or it can open a full-scale investigation if it has serious concerns.

GitHub, the world’s largest code host with more than 28 million developers using its platform, is Microsoft’s largest takeover since the company bought LinkedIn for $26 billion in 2016.

In June, Microsoft announced its intention to acquire GuitHub, in the hope that a deal could be tied up by the end of the year.

The $7.5 billion offer was seen by many as an overvaluation, by the fact that Microsoft offer was approximately 30 times the value of GitHub’s yearly revenue. This suggests that Microsoft could be expecting substantial returns on its investment, placing a lot of trust in the future potential of the enterprise.

Nevertheless, GitHub is in dire straits financially and would welcome the potential increase in investment that Microsoft may be able to offer.

The last time that the European Union supported a Microsoft-led acquisition was during the tech giant’s buyout of Nokia, the Finnish telecommunications and consumer electronics company.

Microsoft is expected to play into the EU’s hands in adopting a healthy approach to competition should the buyout take place. The market expectation is that it will not force customers to use GitHub services.

Along this axis, Microsoft Chief Executive Satya Nadella has tried to assuage users’ worries, saying GitHub would continue to be an open platform that works with all public clouds.

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