In April, the CMA said it was preventing the $69 billion deal from going ahead due to concerns about its impact on the nascent cloud gaming market.
Microsoft’s appeal against the CMA’s decision was scheduled to be heard in a court case beginning on July 28.
But last week the parties said they had made a joint submission to the Competition Appeal Tribunal (CAT) to pause legal proceedings with a view to reaching an out of court agreement over the controversial merger.
And during a case management conference on Monday, CAT provisionally agreed to a two-month stay of the case after the CMA said it would consider a modified deal put forward by Microsoft, Reuters reports.
David Bailey, a lawyer representing the CMA, told the tribunal: “Based upon the discussion to date, both sides – Microsoft and the CMA – have confidence that Microsoft notifying a restructured transaction is capable of addressing the concerns that the CMA has identified.”
Last week the CMA extended the deadline for its final decision on the deal from July 18 to August 29 so that it could consider a fresh proposal from Microsoft.
Microsoft was recently cleared to acquire Activision Blizzard in the US after winning its court battle with antirust regulator the Federal Trade Commission.
The company has been hoping to complete the transaction before its current merger agreement expires on July 18, after which Activision Blizzard could walk away with a $3 billion termination fee if an extension isn’t agreed.