Activision Shareholders Receive $250 Million Settlement in Microsoft Acquisition Dispute

Activision Blizzard Shareholders Reach $250 Million Settlement in Microsoft Acquisition Dispute

WILMINGTON, Delaware, May 22 - Shareholders of Activision Blizzard have reached a $250 million settlement over allegations that the company's former executives and Microsoft shortchanged them when Microsoft acquired the game maker for $75.4 billion in 2023.

The settlement stems from a lawsuit filed by shareholders, led by Swedish pension fund Sjunde AP-Fonden, who accused former Activision Blizzard executives, including Chief Executive Bobby Kotick, of breaching their fiduciary duties to investors by agreeing to a $95-per-share takeover price. The shareholders claimed that Kotick rushed in to the merger in order to keep his job and receive $400 million of change-of-control benefits.

As part of the settlement agreement, the pension fund acknowledged that there was compelling information that undermined any claim that Kotick and the Activision Blizzard defendants failed to act in good faith. Microsoft and Kotick brought counterclaims against Sjunde, which will also be resolved in the settlement agreement. Both sides denied the allegations against them.

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The settlement will be funded 40% by Microsoft, while the remainder will be paid by directors and officers' liability insurance. The payment amounts to around 30 cents for each Activision Blizzard share. The settlement must be approved by Kathaleen McCormick, the chief judge of the Delaware Court of Chancery who is overseeing the litigation.

The defendants said they were settling to avoid the distraction of litigation, while Sjunde said it was settling because the payment was fair. The settlement marks a resolution to one of the largest disputes in the video game industry, which was sparked by Microsoft's acquisition of Activision Blizzard for $75.4 billion in 2023.