Microsoft is paying a substantial settlement to resolve legal disputes with shareholders that arose during its acquisition of Activision Blizzard.

In a filing submitted to a Delaware court on May 22, Microsoft agreed to pay $250 million to settle a class-action lawsuit brought by shareholders regarding its acquisition of Activision Blizzard, hereinafter “Activision.”

This marks the end of a three-year legal battle stemming from the gaming industry’s largest-ever acquisition, valued at $75.4 billion, approximately ₩102.54 trillion.

The lawsuit was initiated by shareholders, including Swedish national pension fund AP7, against Microsoft and former Activision executives. The shareholders alleged that former executives, including former CEO Bobby Kotick, caused financial harm by selling the company at an undervalued price of $95 per share.

The shareholders had further alleged that the timing of the sale was connected to workplace misconduct allegations involving Activision at the time. However, the Stipulation of Settlement states that Microsoft entered into the agreement solely to avoid the burden, expense, and distraction of continued litigation and that the settlement does not substantiate those allegations.

According to the Stipulation of Settlement: “Microsoft is entering into this Stipulation solely to avoid the burden, expense, and distraction of continued litigation. Microsoft does not substantiate any allegations that there has been systemic or widespread workplace misconduct at Activision; that Activision senior executives ignored, condoned, or tolerated a culture of systemic harassment, retaliation, or discrimination; or that Activision’s Board of Directors, including its Chief Executive Officer, Kotick, acted improperly with regard to the handling of any instances of workplace misconduct.”

The Stipulation also states: “Plaintiff acknowledges that its original claims were based in part on media reporting and characterizations of allegations made by the California Civil Rights Department (the ‘CRD’), which the CRD itself admitted in a court-approved consent decree have never been ‘substantiated’ by any ‘court or independent investigation’ and now have been expressly withdrawn.”

It further adds: “Plaintiff acknowledges that, based on the materials provided to date, there is compelling information which undermines any claim that the Board or Mr. Kotick failed to operate in good faith with respect to the matters alleged in the Action.”

According to court documents, 40% of the $250 million settlement will be paid directly by Microsoft, while the remaining 60% will be covered by insurance policies held by former Activision executives. Participating shareholders are expected to receive approximately 30 cents per share. The agreement stipulates that neither Microsoft nor the former executives admit any wrongdoing.

Former CEO Bobby Kotick had previously countersued, claiming the lawsuit was a malicious attack. The settlement resolves the shareholder litigation, subject to final court approval, and will be distributed to eligible Activision shareholders affected at the time of the sale.

The case highlights the legal scrutiny that can follow major corporate transactions, particularly when shareholders allege that company leadership failed to prioritize shareholder interests during a sale process.

Editors Note: The previous version of the article had an inaccurate headline on the settlement amount. The previous version has corrected this amount, as well as added context on the Recitals from the Stipulation of Settlement.