Earlier today, Activision and Vivendi announced plans to merge into one company, known as Activision Blizzard. With the combination of Activision's top selling franchises such as Call of Duty, Guitar Hero, and the Spider-Man license, with Vivendi's golden goose, Blizzard, the new company will likely topple EA's position as the world's largest third-party publisher. In the terms of the agreement, Vivendi Games, home of Crash, Spyro, and Sierra titles such as the upcoming Prototype, will be incorporated into Activision's console-oriented roster, at a value of $8.1 billion, in addition to stock purchasing.
According to a press release (which can be seen on the newly launched Activison Blizzard website), as a result of the merger, shares of Vivendi Games will be converted into nearly 300 million new shares of Activision stock. At the same time, the French publisher has purchased nearly 63 million shares in Activision stock at $27.50, which is a premium price based on the average closing price over the last 20 days, totaling $1.7 billion in cash. It will give Vivendi a 52% ownership stake in the company, although that owner ship stake could rise up to another 16% after the deal closes should Vivendi acquire more common shares from holders during the tender offer.
"Blizzard's industry-leading PC games business, with a track record of nine consecutive bestsellers and a global subscriber base of more than 9.3 million World of Warcraft players, is an exceptional fit for Activision's highly profitable console games business," said Blizzard CEO Mike Morhaime, "From our interactions with the Activision team, it is clear we have much in common in terms of our approaches to game development and publishing. Above all, we are looking forward to continue creating great games for Blizzard gamers around the world, and we believe this new partnership will help us to do that even better than before."
Activision CEO Bobby Kotick's statements gave some insight into the corporate vision of the future. "...By combining leaders in mass-market entertainment and subscription-based online games, Activision Blizzard will be the only publisher with leading market positions across all categories of the rapidly growing interactive entertainment software industry and reach the broadest possible audiences," Kotick said, "...Vivendi Games provides Activision with unique strategic and financial benefits and will allow us to leverage our franchises into emerging online opportunities as Blizzard has done so successfully."
"With Blizzard's successful franchises, such as World of Warcraft, StarCraft and an exciting pipeline of yet-to-be announced titles, Vivendi Games' and Blizzard's management team will join with Activision's strong and experienced leaders to become an even more powerful force for innovation in online and offline interactive entertainment across a wide range of platforms."
Tellingly, Kotick also mentioned Vivendi's heavy stake in the music industry, "This transaction also provides a unique relationship with Universal Music Group - the world's largest music company - which will benefit Guitar Hero and further extend our sizable leadership position in music-based games." Kotick is slated to serve as the CEO of Activision Blizzard once the merger has completed.
The possibilities at hand are endless, from a stronger base of downloadable content for future Guitar Hero titles to Blizzard's expansion into the console front to franchise cross-overs. Regardless, the news is one of the biggest bombshells, alongside EA's acquisition of Pandemic and BioWare in October, to hit the business end of the videogame industry this year.
