Losing its ongoing merger would cost Microsoft dearly, as Activision Blizzard CEO Bobby Kotick confirms reports that his company would receive a $3 billion "breakup" fee should the deal not go ahead. This news comes after the merger was blocked by UK regulators, concerned that it would negatively affect the future of cloud gaming.
Speaking with CNBC, the previously reported $3 billion fee is discussed in the interview, and Kotick doesn't counter the figure. So while the CEO is eager to get the merger over the line in all regions, it's clear that Activision Blizzard will come out of this arrangement a fair bit richer either way. As for Microsoft, it's the exact opposite, as it would still have to foot this smaller bill and miss out on Activision Blizzard at the same time.
In the interview with CNBC, Kotick is asked what Activision Blizzard would do if it remained independent and collected the $3 billion breakup fee.
"If it weren't to get done...by the end of the year, I think we'll be sitting on something like $18 billion of cash," says Kotick. "And...I think if you look at our 30-year history, we have deployed capital for the benefit of our shareholders very well and we'll continue to do that."
In other words, Activision Blizzard is looking out for its shareholders above all else. It remains to be seen if its workers get the same assurances, particularly since the $3 billion would be a significant downgrade on the almost $69 billion that Microsoft would be paying to acquire the company.
Perhaps one of the worst things for workers is that, if the deal doesn't get through, Kotick would remain CEO. According to sources familiar with the situation, Kotick will only step down as Activision Blizzard CEO if the company merges with Microsoft. This is despite the CEO constantly attracting controversy, particularly over his handling of abuse allegations within his company. More than 1,500 employees called for his resignation in 2021, and yet he's still clinging to power.
Of course, there's no telling what will become of Kotick if the deal does get over the line. We've had contradictory reports on the matter, so it's not clear if Microsoft intends to finally get rid of the CEO, replacing him with someone less infamous among developers and fans alike. However, he managed to get re-elected to the board of directors last yet, so his fellow executives don't seem to have given up on him just yet. It's not clear if this would continue should Microsoft decide to push him out after a successful merger.