Microsoft has agreed to pay $250 million to settle a shareholder lawsuit tied to its acquisition of Activision Blizzard. The agreement was filed in Delaware’s Chancery Court and resolves claims that former Activision CEO Bobby Kotick and other board members signed off on a discounted transaction to escape the sexual harassment crisis surrounding the company.
The case had been running for nearly four years.
Who Filed the Lawsuit and Why
The lawsuit was filed by Sjunde AP-Fonden, a Swedish pension fund also known as AP7, which alleged the deal was rushed by Kotick to avoid fallout from reports of sexual misconduct at Activision and protect his own payout from the deal.
Court documents showed that shareholders accused Kotick of rushing the merger so he could retain his job and $400 million in change-of-control benefits. The plaintiffs also claimed the $95-per-share takeover price was too low from the start, and that the price only looked worse as Activision’s performance improved during the 21-month regulatory approval process.
A Delaware judge let the case move forward against Kotick and the board in October 2025, though she rejected allegations that Microsoft had exploited the scandal by colluding with them to drive down the deal price.
What the $250 Million Covers
The settlement amounts to roughly $0.30 per share for eligible Activision shareholders, on top of the $95.00 per share they received when the merger closed in October 2023, plus $1.46 in ordinary dividends paid during the deal’s regulatory review period.
The $250 million will go to Activision shareholders affected by the deal. Court approval is still required before any money changes hands.
The settlement also ends all related legal actions, including countersuits previously filed by both Kotick and Microsoft.
Microsoft and Kotick Both Deny the Core Allegations
Neither side is admitting wrongdoing. Microsoft stated it entered the settlement solely to avoid the burden and expense of continued litigation, and does not substantiate any allegations of systemic or widespread workplace misconduct at Activision, or that senior executives ignored or tolerated a culture of harassment, retaliation, or discrimination.
Activision Blizzard had previously paid $54 million in 2023 to settle a separate California lawsuit alleging the company discriminated against female employees. That settlement included similar language denying that any court or independent investigation had substantiated claims of systemic harassment.