I can imagine Activision's stock is going to shoot up, but I really hope Viviendi doesn't fuck them over due to their terrible corporate business history.We're pleased to announce that along with the other companies that make up Vivendi Games, we are merging with Activision to form a new global entertainment organization called Activision Blizzard (pending shareholder and regulatory approval). Similar to our previous arrangement, Blizzard Entertainment will now operate as a division of this new organization.
There will be no changes to our games, our websites, our personnel, or our day-to-day operations as a result of the deal. However, this combining of resources will benefit all of the companies involved and will further strengthen Blizzard's ability to continue delivering high-quality content for our players around the world for many years to come.
More infoz: http://www.iht.com/articles/2007/12/02/ ... acti03.php
Vivendi, the French media and entertainment conglomerate, said Sunday that it planned to acquire a controlling stake in the U.S. video game publisher Activision in a deal aimed at taking advantage of booming video game markets like South Korea and China.
Under the agreement, which values Activision at $18.9 billion, Vivendi would combine its game division with Activision, creating the largest video game company in the world that is not owned by a maker of game consoles.
Vivendi and Activision executives said that by combining the two game businesses, they could help Activision, which has developed popular games for consoles like the Sony PlayStation 3 and Microsoft's Xbox 360, move more strongly into online "massively multiplayer" games, which have legions of devoted fans in Asia and elsewhere.
Vivendi has specialized in multiplayer games like "World of Warcraft," which has more than nine million players worldwide, including millions of paying subscribers in China and South Korea, making them some of the only successful Western entertainment exports in a region ravaged by piracy.
Activision, meanwhile, publishes the skateboarding game "Tony Hawke," the war game "Call of Duty" and one of the industry's current best sellers, "Guitar Hero," which allows people to strum along on a plastic guitar to tunes played on the television.
Robert Kotick, the chairman and chief executive of Activision, said in an interview that he felt his company needed to add a multiplayer component to address an industry being transformed by the Internet. He said that after exploring ways to develop such expertise internally, he determined the better, if not the only way, was to merge with an outside company.
"We looked every which way to figure out how to participate in what Blizzard had created," he said. "We couldn't find a way to duplicate it, but we could acquire the expertise."
Blizzard Entertainment is the name of Vivendi's most successful game studio.
Kotick, the longest standing chief executive in the video game industry, will retain his position atop the combined entity.
Bruce Hack, the chief executive of Vivendi Games, will become deputy chairman and chief corporate officer and lead the merger integration as well as head finance, human resources and legal functions, the two companies said.
One challenge for the companies is integration. The new company will have 6,000 employees, and Kotick said that if the combined entity met its growth targets, it could be double that size within three or four years.
Another challenge is that the video game industry - while it has been growing steadily as interactive entertainment and cut sharply into traditional media - is a hit-and-miss business. Much as in the movie business, every video game company, including Activision, has had its share of disappointments, failed games and costly efforts to develop games that flopped.
Further, Vivendi is buying Activision while it is in the middle of a hot streak.
Vivendi and Activision said that with $3.8 billion in revenue this year, the combined company would be larger than Electronic Arts, the biggest independent game publisher today, with revenue of $3.1 billion. The two companies said they expected operating income for the new company of $1.1 billion by 2009.
The agreement values Activision shares at $27.50 each, a 24 percent premium over the close Friday of $22.15.
Under the arrangement, Vivendi will fold its games operations, valued at $8.1 billion, into Activision and pay Activision shareholders $1.7 billion in cash. That will give Vivendi 52 percent ownership of the new company, to be called Activision Blizzard.
Vivendi plans to raise its stake to 68 percent through a $4 billion cash tender offer for additional Activision Blizzard shares. Though the new entity will continue to trade publicly on the Nasdaq Stock Market, Jean-Bernard Lévy, the chief executive of Vivendi, said it did not mean that Vivendi was pulling back from the video game industry.
"We obviously remain very committed to this business," Lévy said.
Lévy said the combined company would look for other acquisition opportunities in the game industry, which remains fragmented, with large publishers like Activision and Electronic Arts working with hundreds of game development studios around the world.
"This isn't the end of the game," Lévy said.
Activision already has a partnership with a Vivendi division, Universal Music Group, providing music for the game "Guitar Hero." Kotick said that while there might be other opportunities to take advantage of Vivendi content in video games, the main benefits of combining the two companies would be on the distribution side.
