Microsoft confirmed its intention to take over Activision Blizzard in January 2022. Activision Blizzard is the world’s biggest independent games producer underpinned by hit titles like Diablo, Call of Duty, and World of Warcraft. Microsoft already made an offer of $68.7 billion to make this purchase. But, more than 18 months later, multiple obstacles have come up stopping the deal from happening.
In December 2022, the Federal Trade Commission filed a lengthy lawsuit to stop this deal. In June 2023, the FTC followed up with a restraining order and injunction filed in a federal court to stop this deal before a July 18 deadline and now has an administrative hearing expected to happen on August 2, 2023.
The United Kingdom’s Competition and Markets Authority also decided to stop this acquisition. However, Activision Blizzard and Microsoft are appealing the CMA’s decision, with a hearing scheduled for July 24.
There is one specific person who would mostly be interested to see this deal close as soon as possible: Activision Blizzard CEO Bobby Kotick. He could earn up to $500 million in case the acquisition is successful.
Based on an SEC filing from earlier in 2023, Kotick owns about 4.3 million shares of Activision Blizzard stock, with permission to buy around 2.2 million more shares. That could give him an impressive 6.5 million shares in total.
As part of this acquisition, Microsoft wants to offer buyouts at $95 per share. The other 2.2 million shares are stock options with exercise prices that begin at $47 per share. Exercising these could earn him an extra $98.8 million, giving him about $507 million before taxes.
Hence, yes, Kotick most definitely stands to gain a lot of money from the deal.
In the meantime, Microsoft could possibly lose a lot. Although $68.7 billion is a huge price tag, one legal policy writer Lee Hepner noted the firm is already on the hook for a $3 billion breakup fee in case this deal falls through. That is a huge amount to pay for nothing in return.
For clarity, regulators and watchdogs in many countries have already approved this deal. Brazil, the European Union, Chile, South Africa, Saudi Arabia, and Japan are all on board with this acquisition. However, since this is an unexpected acquisition, one that might completely change the future of the cloud and console video games industry, there are going to be many expected hiccups along the way.
Assuming that Activision Blizzard and Activision can clear all these hiccups, Kotick is going to enjoy a massive payday.