User:Sh-abkcomms/Misconduct trim

Workplace misconduct lawsuit and proposed acquisition by Microsoft (2021–present)
On July 20, 2021, the California Department of Fair Employment and Housing (DFEH) filed a suit alleging sexual harassment, employment discrimination and retaliation on the part of Activision Blizzard. A second lawsuit was filed against the company by its shareholders asserting it falsified knowledge of these problems in their financial statements, though this suit was dismissed due to failure to meet thresholds for claims, The Equal Employment Opportunity Commission had also filed suit against Activision-Blizzard from their own investigation of the workplace conditions but the company had settled the same day it was filed, which included setting aside an US$18 million relief fund for affected employees.

On January 18, 2022, Microsoft announced that it would be acquiring Activision Blizzard for $68.7 billion in an all-cash deal, or approximately $95 per share. Activision Blizzard's stock price jumped nearly 40% that day in pre-market trading. The deal would make Microsoft the third-largest gaming company in the world and the largest headquartered in the Americas, behind Chinese company Tencent and the Japanese conglomerate Sony.

Activision Blizzard's shareholders approved of the acquisition near-unanimously in April 2022. In the United States, the acquisition was reviewed by the Federal Trade Commission (FTC) rather than traditionally by the U.S. Department of Justice, as the agency had raised more concerns over mergers and acquisitions in the Big Tech sector in the last decade. In addition, the U.S. Securities and Exchange Commission (SEC) reviewed potential claims that investors close to Kotick used insider trading prior to the acquisition announcement; Activision Blizzard said they would fully cooperate with the SEC's review.

On April 26, 2023, the United Kingdom's Competition and Markets Authority (CMA) blocked Microsoft's acquisition of Activision Blizzard, claiming that it would lead to "reduced innovation and less choice for UK gamers over the years to come." The same day, Microsoft announced plans to appeal this ruling.

Workplace misconduct lawsuit and proposed acquisition by Microsoft (2021–present)
As a result of a two-year investigation, on July 20, 2021, the California Department of Fair Employment and Housing (DFEH) filed a suit alleging sexual harassment, employment discrimination and retaliation on the part of Activision Blizzard. The details of the allegations involve accusations of inappropriate behavior towards women and fostering a "frat boy" culture. The company's management initially tried to pass off the allegations as false, which led to employees sharply criticizing the management's lack of seriousness in the matter. Even after CEO's Bobby Kotick's open letter to employees that said their initial response was improper and that they would be internally reviewing matters, employees still staged a walk-off to protest the lack of action the company had taken in regards to the lawsuit. DFEH's lawsuit brought a second lawsuit was filed against the company by its shareholders asserting it falsified knowledge of these problems in their financial statements, though this suit was dismissed due to failure to meet thresholds for claims, and led the U.S. Securities and Exchange Commission to begin evaluating the company. The Equal Employment Opportunity Commission had also filed suit against Activision-Blizzard from their own investigation of the workplace conditions but the company had settled the same day it was filed, which included setting aside an US$18 million relief fund for affected employees. Kotick requested the board to reduce his pay to the bare minimum required by California law in August 2021 and withhold his bonuses until the lawsuit was resolved, after a US$155 million bonus package he received in July 2021 following investors criticism on the size of the package. A Wall Street Journal report in November 2021 alleged that Kotick knew about misconduct and sexual harassment within the company without reporting them to the board of directors, leading to an increased pressure on Kotick to leave the company. The lawsuit became a debated matter in the industry as it touches on the Me Too movement and lack of unionization for video game developers to protect them from such mistreatment.

On January 18, 2022, Microsoft announced that it would be acquiring Activision Blizzard for $68.7 billion in an all-cash deal, or approximately $95 per share. Activision Blizzard's stock price jumped nearly 40% that day in pre-market trading. The deal would make Microsoft the third-largest gaming company in the world and the largest headquartered in the Americas, behind Chinese company Tencent and the Japanese conglomerate Sony. Goldman Sachs will serve as the financial advisor to Microsoft, and Allen & Company will be Activision's financial advisors. Simpson Thacher will serve as legal advisor for Microsoft while Skadden will serve as legal advisor for Activision. The deal has been approved by both companies' board of directors and is expected to close in 2023 following international government regulatory review of the action. Upon completion of the deal, Activision Blizzard would be a sibling entity to Xbox Game Studios under a new Microsoft Gaming division with Phil Spencer as its lead. The deal would also allow Microsoft to offer Activision Blizzard games on its Xbox Game Pass service. Spencer also spoke to reviving some of the games in Activision Blizzard's past that he himself enjoyed, mentioning series such as King's Quest, Guitar Hero and Hexen: Beyond Heretic.

Kotick stated that he, Spencer, and Microsoft's CEO Satya Nadella have had discussions in 2021 on their concern of the power of Tencent, NetEase, Apple, Inc. and Google, and that Activision Blizzard lacked the computation expertise in machine learning and data analytics that would be necessary to compete with these companies. According to Kotick, this led to the idea of Microsoft, which does have those capabilities, acquiring Activision Blizzard at an attractive price point. In a statement released on Activision Blizzard's investor website, the company said its industry is the "most dynamic and exciting category of entertainment across all platforms" and that gaming will be the forefront of the development of the emerging metaverse. Some journalists saw this acquisition, and Microsoft's March 2021 acquisition of Bethesda Softworks, as a bid to compete against Meta Platforms, formerly known as Facebook.

The timing of the acquisition was reported by The Wall Street Journal and Bloomberg News to be in response to the ongoing DFEH lawsuit. Reports from both newspapers stated that Activision Blizzard had been considering a buyout from other companies, including Facebook parent company Meta Platforms, due to the weaker than expected financial performance of their latest game releases and production delays. Based on SEC filings related to the merger, Microsoft approached Activision Blizzard again in the days immediately following the November 2021 Wall Street Journal report regarding a buyout. While Kotick had been hesitant about selling the company, the board had gone ahead with the deal as they continued to fear the ongoing impact of the lawsuit while Kotick remained on the board The buyout would provide a graceful exit for Kotick in the future, ranging in $252.2-292.9 million over most scenarios.

According to official announcements, under the deal Kotick will remain the CEO of Activision Blizzard,   and is expected to keep the position while the deal goes through regulatory processes, as Activision Blizzard remains independent from Microsoft until the deal closes. According to The Wall Street Journal, Kotick "will depart once the deal closes" under Microsoft's management, while Kotick said in an interview that he has an interest in remaining in the company. Microsoft has yet to speak directly about the Activision Blizzard lawsuit following news of the acquisition, however the company announced a week prior that it would be reviewing its own sexual harassment and gender discrimination policies.

Several Activision Blizzard employees have expressed cautious optimism with respect to the deal, with the ABK Workers Alliance, a group of employees pushing for unionization in the wake of the DFEH lawsuit, saying the acquisition did "not change the goals" of the Alliance. A report by Business Insider suggested several Microsoft employees have raised their concern on the deal with respect to the sexual harassment scandals and Activision Blizzard workplace culture, hoping for "concrete steps to make sure we aren't introducing a dangerous and unwelcome culture." On January 19, 2022, World Bank president David Malpass criticized the acquisition, contrasting the acquisition price with the smaller amount of bond financing available to developing countries during the COVID-19 pandemic. After Sony had stated that they expect Microsoft to honor all of Activision Blizzard's publishing agreements for multiplatform games, Spencer and Microsoft president Brad Smith reassured that Microsoft will continue these existing agreements and expressed their desire to keep Call of Duty and other popular Activision Blizzard games on PlayStation beyond the terms of these agreements, as well as explore the opportunity to bring these games to the Nintendo consoles.

Activision Blizzard's shareholders approved of the acquisition near-unanimously in April 2022. In the United States, the acquisition was reviewed by the Federal Trade Commission (FTC) rather than traditionally by the U.S. Department of Justice, as the agency had raised more concerns over mergers and acquisitions in the Big Tech sector in the last decade. U.S. Senators Elizabeth Warren, Bernie Sanders, Sheldon Whitehouse, and Cory Booker expressed their concerns about the merger to the FTC as part of the FTC's investigation, saying that both companies have "failed to protect the rights and dignity of their workers" and that the merger should be opposed if "the transaction is likely to enhance monopsony power and worsen the negotiating position between workers and the parties." In addition, the U.S. Securities and Exchange Commission (SEC) reviewed potential claims that investors close to Kotick used insider trading prior to the acquisition announcement; Activision Blizzard said they would fully cooperate with the SEC's review.

The New York City Employees' Retirement System, which are shareholders of Activision Blizzard, sued the company in April 2022, arguing that the company had made the acquisition deal quickly with Microsoft as to try to cover up the misdoings of Kotick that had been uncovered as part of the ongoing DCEH lawsuit and escape any liability.

Senior executives Lulu Cheng Meservey and Kerry Carr joined the Activision Blizzard board of directors in 2022.

On April 26, 2023, the United Kingdom's Competition and Markets Authority (CMA) blocked Microsoft's acquisition of Activision Blizzard, claiming that it would lead to "reduced innovation and less choice for UK gamers over the years to come." The same day, Microsoft announced plans to appeal this ruling.