In Ap-Fonden v. Activision (Feb. 29, 2024), the Delaware Court of Chancery, in a pleading-stage decision on the defendants’ motion to dismiss, declined to dismiss the plaintiff’s claims that the merger between Activision Blizzard, Inc. (the “Company”) and Microsoft Corporation, which closed in October 2023, was invalid.

Gail Weinstein, senior counsel at Fried Frank. Courtesy Photo

The court found it reasonably conceivable that the procedures followed by the Company’s board of directors (the “Board”) in approving the parties’ merger agreement—which reflected long-standing, common board practices—violated several sections of the DGCL. Perhaps most notably, the court also declined to dismiss the plaintiff’s claim that, as the merger was invalid, the Board had committed an unlawful conversion of the plaintiff’s shares.

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