The merger of Microsoft and Activision Blizzard, the largest acquisition operation the technology and gaming world has ever seen, continues to create legal aftershocks.

Microsoft is agreeing to pay $250 million to settle a class-action suit filed by shareholders who claim former Activision Blizzard CEO Bobby Kotick quickly sold the company for less than its price to cover up harassment and terrible working conditions scandals and to protect his own position.

With the settlement documents submitted to the Delaware Court of Chancery, this legal process, which has been keeping the technology lobbies busy for a long time and turned into a snake story, is finally coming to an end.

What Happened Behind the Scenes of the Case?

The foundations of the process are actually based on the workplace discrimination and harassment lawsuit filed by the state of California against Activision Blizzard in July 2021.

When complaints of toxic work culture within the company came to light, eyes and arrows of criticism were directed directly at the CEO of the time, Bobby Kotick.

In this turbulent period, Microsoft’s surprise attempt to acquire the company by offering $95 per share in January 2022 was met with skepticism by some shareholders.

Sweden-based pension fund Sjunde AP-Fonden (AP7) initiated legal proceedings, arguing that Kotick accepted this offer quickly, disregarding the real potential value of the company, in order to relieve the heavy pressure on him and protect his personal interests.

Mutual Accusations and the Path to Reconciliation

This legal battle, which lasted four years, became quite complicated at times. Bobby Kotick even filed a countersuit against the AP7 fund for abusing the legal process.

However, the latest details reflected in the court documents show that Microsoft chose to compromise in order not to waste any more time, distract its focus and increase legal costs.

The technology giant firmly denies claims that there is systematic workplace abuse within Activision Blizzard or that the board of directors is acting irregularly. As clearly stated in the settlement documents, this $250 million payment does not constitute an admission of wrongdoing.

As an interesting detail, the California case was also concluded in December 2023, with the company paying $54 million without admitting any wrongdoing. The AP7 fund also admits in its new settlement text that its old arguments were never fully proven by the court.

What Does It Mean for Shareholders?

If the court approves this compromise offer in its current form, those who invested in the company within the specified date will take a deep breath.

Investors who hold Activision Blizzard shares between January 2022, when Microsoft announced its intention to purchase, and October 2023, when the agreement was legally completed, are entitled to benefit from this $ 250 million fund.

This huge measure translates into an additional payout of approximately 30 cents per share for eligible shareholders.

A Small Deviation in the Most Valuable Meaning in the History of Technology

Microsoft initially announced this acquisition as a $68.7 billion agreement.

However, after difficult efforts with regulatory bodies such as the UK Competition and Markets Authority (CMA) and the US Federal Trade Board (FTC), the process took a little longer.

The total cost of the merger, which was completed in October 2023, was reflected in Microsoft records as 75.4 billion dollars.

Considering the total size of this operation, which is the largest purchase not only in the gaming world but also in the general technology sector, the $250 million penalty decided to be paid corresponds to only 0.33 percent of the total purchase cost.

Nevertheless, this compromise is recorded as a historical example showing how internal crises and shareholder rights can affect the acquisition processes of technology giants.