In January 2022, Microsoft announced its intention to acquire Activision Blizzard. Activision Blizzard is the world's largest independent games producer thanks to hit titles such as Call of Duty, Diablo, and World of Warcraft. Microsoft offered $68.7 billion to make the acquisition. Yet over the past year and a half, numerous obstacles have come up to stop the deal from happening.
The Federal Trade Commission filed a lawsuit in December 2022 to block the deal. Last month, the FTC followed up with a restraining order and injunction in federal court to halt the deal before a July 18 deadline and now has an administrative hearing scheduled for August 2. The UK's Competition and Markets Authority also opted to block the acquisition; Microsoft and Activision Blizzard are appealing the CMA's decision, with a hearing set for July 24.
There's one person in particular who'd especially be interested to see the deal close: Activision Blizzard CEO Bobby Kotick. Bobby could potentially earn half a billion dollars if the acquisition happens.
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Per an SEC filing from earlier this year, Kotick owns just under 4.3 million shares of Activision Blizzard stock, with the right to acquire a little over 2.2 million more. That could potentially give him nearly 6.5 million shares in total.
As part of the acquisition, Microsoft plans to offer buyouts at $95 per share. Kotick's current stock would be worth about $408 million. Those other 2.2 million shares are stock options with exercise prices starting at $47 per share. Exercising those could earn him another $98.8 million, giving him nearly $507 million before taxes.
So, yes, Kotick certainly stands to gain a lot from the deal.
Meanwhile, Microsoft could potentially lose a lot. Though $68.7 billion is a hefty price tag, legal policy writer Lee Hepner noted the company is on the hook for a $3 BILLION BREAK UP FEE if the deal falls through. That's a ton of money to pay for nothing in return.
To be clear, regulators in many nations have already approved the deal. The European Union, South Africa, Japan, Brazil, Saudi Arabia, and Chile are all on board with the acquisition. But since this is an unprecedented acquisition — one that could potentially change the future of cloud and console video games — there are going to be several hurdles along the way.
Assuming Microsoft and Activision Blizzard can clear them all, Kotick will have himself a major payday.
