So the UK cannot stop the takeover, but it can — of course — block Microsoft from carrying out any business in the UK — and that's, effectively, what's happening here?
Microsoft and Activision do both have various subsidiaries in the UK, too.
I don't see any reason as to why this couldn't happen, the EU has already demonstrated its concerns on relying too much in certain companies, and they don't have as much of a flagrant issue as the aforementioned agressive move would imply.