adminThe Microsoft Activision Blizzard lawsuit settlement would resolve a shareholder case challenging Microsoft’s $69 billion acquisition of Activision Blizzard. Under a preliminary agreement, Microsoft will contribute to a $250 million payment, which is still subject to final approval by the court.
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What the Microsoft Activision Blizzard lawsuit settlement covers
Swedish pension fund Sjunde AP-Fonden, also known as AP7, filed the class action lawsuit in 2022. The case sought to block the acquisition and alleged that Activision Blizzard CEO Bobby Kotick moved too quickly to approve the sale. According to the lawsuit, that process may have prevented shareholders from receiving a higher price than the agreed $95 per share.
Microsoft and Kotick denied the allegations. Microsoft said it agreed to settle to avoid the distraction and expense of continued litigation. AP7 described the proposed payment as fair. The settlement is not a court finding that the allegations were true.
How the $250 million payment will be funded
A preliminary settlement filed in Delaware’s Court of Chancery provides that Microsoft will pay 40% of the amount. Directors’ and officers’ liability insurance is set to cover the remaining 60%. The total settlement works out to about 30 cents for each Activision Blizzard share.
The agreement has not received final court approval. Readers following the case should distinguish between a preliminary agreement and a final judgment: the court’s approval is the remaining step identified in the filing.
Statements about Activision Blizzard workplace claims
In its filing, Microsoft said the settlement did not substantiate claims of widespread workplace misconduct, or allegations that senior executives or the board tolerated systemic harassment, retaliation, or discrimination. The settlement also referred to the California Civil Rights Department (CRD) and its earlier lawsuit against Activision Blizzard, filed in 2021 over sexual misconduct and discrimination allegations.
AP7 acknowledged that some of its initial claims relied on media coverage and descriptions of allegations made by the CRD. The settlement cited a court-approved consent decree in which the CRD stated that the claims had not been substantiated by a court or independent investigation and had been withdrawn. The CRD’s statement included in the settlement likewise said that no court or independent investigation had substantiated allegations of widespread sexual harassment or a company culture of systemic harassment, retaliation, or discrimination.
Related allegations involving Embracer
Kotick argued that AP7’s lawsuit was connected to Swedish gaming company Embracer, pointing to AP7 executive Emma Ihre’s previous work at the company. His lawyers alleged that the case could benefit Embracer by limiting competition from Activision Blizzard. Embracer rejected the claims, stating that it had not coordinated with AP7 and had not directed Ihre or the pension fund to act.
The acquisition closed in October 2023 after the UK Competition and Markets Authority completed its investigation. The proposed Microsoft Activision Blizzard lawsuit settlement concerns the shareholder case over the deal; its final status depends on court approval.
