Activision, Inc. and Vivendi have announced that they have signed a definitive agreement to combine Vivendi Games with Activision, reportedly a $9.85 billion deal. After the completion of transaction, the new company will be called Activision Blizzard.

 

As per the merger deal, Vivendi Games will be merged with a wholly owned subsidiary of Activision. The shares of Vivendi Games will be converted into 295.3 million new shares of Activision common stock. Concurrently with the merger, Vivendi will purchase 62.9 million newly issued shares. The terms of the deal allows Vivendi to have approximately 52 percent ownership stake in Activision Blizzard on a fully diluted basis.

Activision is an independent publisher of interactive entertainment, and is best known for its top-selling franchises, including Guitar Hero, Call of Duty and the Tony Hawk series, as well as Spider-Man, X-Men, Shrek, James Bond and TRANSFORMERS. Blizzard Entertainment, a division of Vivendi Games, owns the multi-player online role-playing game franchise, World of Warcraft, which reportedly has over 9.3 million subscribers worldwide.

Jean-Bernard Levy, Chairman of the Management Board and CEO at Vivendi stated in a press release: “This alliance is a major strategic step for Vivendi and is another illustration of our drive to extend our presence in the entertainment sector.” He also stated that by combining Vivendi's games business with Activision, both the companies are creating a worldwide leader in a high-growth industry.

Levy added, “We are excited about the opportunities for Activision Blizzard as a broader entertainment software platform. We believe this transaction will create significant value for Activision Blizzard and Vivendi stockholders.” He also believed that combined strength of the existing management teams at both companies will set the stage for further profitable growth of Activision Blizzard, and remarked “We look forward to being an active and supportive majority stockholder in a company that is poised to lead the worldwide interactive entertainment industry in the years ahead.”

Rene Penisson, member of the management board at Vivendi and current chairman at Vivendi Games, added: “We are very confident that by combining forces, Activision Blizzard will set the highest standards in quality, reputation and profitability, and will bring together the best creative teams in the industry. The combination of this unique product portfolio with highly professional employees gives us great confidence in the growth prospects for Activision Blizzard.”