Activision Blizzard Pays $46M For Major League Gaming Assets (NASDAQ:ATVI)

Activision Blizzard has reportedly acquired a majority of Major League Gaming’s assets in a $46 million deal. Major League Gaming was once the largest esports company in North America. The company has not yet publicly confirmed the report.

Founded by Sundance DiGiovanni and Mike Sepso in 2002, MLG helped bring eSports to television and the mainstream. The company opened the United States’ first professional gaming arena in Ohio in 2014 and planned to open another in China by 2017. However, MLG’s relevance has waned in recent years. In October, the company lost the hosting rights for the Call of Duty World League’s Pro Division to the ESL.

MLG has been suffering under a heavy debt load for a while now. Some believe that this debt is the main reason why the company signed the deal with Activision Blizzard. MLG has filed for multiple debt financing rounds this year alone, for a total of over $6 million in new investment.

MLG’s Board of Directors approved the Asset Purchase Agreement in a special meeting on Dec. 21. The next day, a letter went out to stockholders informing them of the sale. The deal between MLG and Activision immediately sparked criticism from other stakeholders. Most of the money gained through the agreement will be used to pay off MLG’s debts and loans.

Some investors claim that MLG signed a deal without consulting stockholders. However, Delaware law states that stockholders are not required to be informed by the purchase of a company if the majority of large shareowners agree. According to a statement by the company, the deal was made as a “corporate action taken without a stockholders’ meeting by less than unanimous written consent of our stockholders,” allowed under Section 228(e) of the Delaware General Corporation Law.”

The deal essentially dissolves the professional gaming organization. Sepso has reportedly joined Activision as the Senior Vice President of the eSports division. DiGiovanni has reportedly left his role as CEO of MLG and has been replaced by former CFO Greg Chisholm. It is unclear how the deal will affect other MLG ventures, like the Counter-Strike: Global Offensive Major Championship coming up in Columbus, OH.

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