Microsoft settles Activision merger lawsuit for $250M

Microsoft has just shelled out another $250 million as part of the Activision Blizzard acquisition. The deal, which had already cost the company more than $70B to complete, drew in a lawsuit, which Microsoft has now paid a hefty fee to settle out of court.

The lawsuit was originally filed in 2022 by the Swedish pension fund Sjunde AP-Fonden (AP7), accusing Activision and Microsoft of rushing the deal at the expense of shareholders in an effort to bury ongoing misconduct allegations at Activision Blizzard. They claimed that the deal did not offer the best value for investors, despite Microsoft paying a premium $95 per share at the time. Microsoft has now settled the suit for $250M, with 40% of that money coming from Microsoft itself and the rest coming from insurance policies.

Former Activision chief, Bobby Kotick, is now making the claim that the Swedish Pension Fund's lawsuit was an ‘activist' lawsuit, put out in secret collaboration with rival publisher, Embracer Group, to bring more attention to the misconduct allegations at Activision and make it harder for the company to recruit talent, thus giving Embracer an edge when it came to hiring the best developers to build up its own studios.

As you might expect, Embracer Group denies this outright, telling Game File that Embracer “did not and do not need any help from a Swedish pension fund in competing with Activision”.

Kotick ultimately succeeded in selling off Activision to Microsoft in a landmark deal that was, at the time, one of the largest tech mergers in history. He ended up getting a $400 million payout for his part in the deal.

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KitGuru Says: I don't think anybody thought it was a coincidence that Activision was suddenly up for sale after a raft of widespread allegations both against Kotick himself, and against other executives within Activision Blizzard. I don't believe that the lawsuit really required any extra motivation from an outside party like Embracer, but I also don't think that it is true to say that shareholders didn't get the best deal. Kotick had been soliciting offers from more than just Microsoft at the time, and ultimately, Microsoft did pay a premium to get the deal done. 

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