Microsoft to Pay $250 Million to Settle Activision Blizzard Acquisition Lawsuit

Microsoft has agreed to pay $250 million to settle a 2022 class action lawsuit tied to its $69 billion purchase of Activision Blizzard. The suit was filed by Swedish pension fund Sjunde AP-Fonden, also known as AP7, and challenged the deal before it closed in October 2023.

AP7 alleged that former Activision Blizzard CEO Bobby Kotick rushed the sale to Microsoft, leaving shareholders with a worse price than they might have received otherwise. Microsoft and Kotick denied the claims. Microsoft said it agreed to settle to avoid the distraction of ongoing litigation, while AP7 described the payment as fair.

The preliminary settlement, reported by Game File, still needs final approval from Delaware’s Court of Chancery. Microsoft will cover 40% of the payment, with the remaining 60% coming from directors’ and officers’ liability insurance. The total works out to about 30 cents per Activision Blizzard share.

The filing also addresses claims connected to workplace misconduct allegations at Activision Blizzard. AP7 acknowledged that some of its original claims were based on media reports and allegations from California’s Civil Rights Department, which later said no court or independent investigation had substantiated claims of systemic or widespread sexual harassment at the company.

The Microsoft-Activision Blizzard deal officially closed in October 2023 after a long regulatory fight, including review by the UK’s Competition and Markets Authority. The settlement doesn’t change the ownership of Activision Blizzard, but it does appear to close one more legal dispute left over from the acquisition.

The settlement seems odd as gaming valuations have pretty much fallen across the board since the Activision Blizzard transactions. Shareholders have seemingly gotten more than full value for their shares.