Published: 2025/10/03 18:08:04
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A shareholder lawsuit challenging Microsoft’s acquisition of Activision Blizzard Inc. is progressing in the Delaware Chancery Court,with a judge recently allowing the case to move forward. The lawsuit alleges that Activision Blizzard’s board of directors breached their fiduciary duties to shareholders by accepting Microsoft’s initial $68.7 billion offer, claiming the deal undervalued the company and failed to adequately address concerns about the company’s workplace culture.
Background of the Lawsuit
The lawsuit, Sjunde AP-Fonden v Activision Blizzard Inc et al, was filed in 2022 shortly after Microsoft announced its intent to acquire Activision Blizzard. The plaintiffs, led by Swedish pension fund Sjunde AP-Fonden, argue that the board rushed into the deal without properly exploring other potential offers or fully investigating allegations of sexual harassment and misconduct within Activision Blizzard. These allegations, which surfaced in late 2021, significantly impacted the company’s reputation and stock price.
Key Allegations
- Breach of Fiduciary Duty: The core claim is that the board prioritized a speedy sale over maximizing shareholder value.
- Inadequate Sales Process: Plaintiffs contend the board did not sufficiently market Activision Blizzard to other potential buyers.
- Workplace Culture Concerns: The lawsuit highlights the failure to adequately address and disclose the extent of the toxic workplace culture allegations.
Recent Developments
Delaware Chancery Court Judge Travis L. Jason recently denied Activision Blizzard’s motion to dismiss the case,allowing it to proceed to finding. This means the plaintiffs can now seek documents and testimony from board members and other key individuals involved in the deal. The judge found that the plaintiffs presented a reasonable basis to believe the board may have acted improperly. Reuters reported on this growth in February 2024.
The lawsuit is being closely watched as it could potentially influence future mergers and acquisitions, especially those involving companies facing significant reputational risks. The outcome could also set a precedent for board accountability in addressing workplace culture issues.
Microsoft’s Acquisition Completion
Despite the ongoing litigation,Microsoft completed its acquisition of Activision Blizzard in October 2023,following regulatory approvals from various jurisdictions worldwide. Microsoft announced the completion of the deal on its official news website. The acquisition brought popular gaming franchises like Call of Duty,World of Warcraft,and Diablo under Microsoft’s ownership.
Current Status and Next Steps
As of October 3, 2025, the case remains active in the Delaware Chancery Court.Discovery is underway,and a trial date has not yet been set. Shareholders’ lawyers did not instantly respond to similar requests for comment.
Case Details
The case is Sjunde AP-Fonden v Activision Blizzard Inc et al, Delaware Chancery Court, No. 2022-1001.
(Reporting by jonathan Stempel in New York; Editing by Bill Berkrot)