announcement of the impending merger of Activision and Vivendi Games that was announced
in December 2007 caused shockwaves throughout the industry that are still
being felt now, in mid-2008, as the deal rolls towards completion.
The prospective company
(still pending approval for its existence from stockholders and various
government agencies) has made even further waves with other recent moves, such upcoming
CEO Bobby Kotick floating concepts such as Blizzard being used to push
Activision franchises such as Guitar Hero
into Asian markets
and the decision to leave the Entertainment Software Association (and as a result
not taking part in this year's E3).
in-depth investigation, Gamasutra will be summarizing the details of the merger
and look at their moves since the announcement, with commentary from some of
the industry's most respected authorities in their field, including Wedbush
Morgan's Michael Pachter and game attorney Thomas H. Buscaglia.
The Facts of the Deal
and Vivendi announced on Sunday, December 3rd that they had signed
definitive agreement to combine Vivendi Games and Activision into a new
company, Activision Blizzard, creating "the world's largest pure-play
online and console game publisher" -- a claim based on the expectation for
an approximate $3.8 billion in pro-forma combined calendar 2007 revenues, the
highest operating margin of a major third-party publisher.
claim has been disputed (including here on Gamasutra) it's generally
considered that Activision Blizzard will be at least on a par in size with
transaction is still subject to the approval of Activision's stockholders, but
has been approved by the European Commission and, of course,
the boards of directors of Vivendi, Vivendi Games and Activision.
terms of the announced agreement Vivendi Games is to be "merged with a
wholly owned subsidiary of Activision" -- resulting shares of Vivendi
Games being converted into 295.3 million new shares of Activision common
Based on the transaction price of
$27.50 per share of Activision common stock, this implies a value of
approximately $8.1 billion for Vivendi Games.
with this merger, Vivendi will purchase 62.9 million newly issued shares of
Activision common stock at a price of $27.50 per share for a total of $1.7
billion in cash. As a result of these transactions, Vivendi will own an
approximate 52% ownership stake in Activision Blizzard.
the completion of the transaction there will be a slight executive shake-up:
Robert Kotick will be president and chief executive officer of Activision
Blizzard. Bruce Hack, current chief executive officer of Vivendi Games, will
serve as vice-chairman and chief corporate officer of Activision Blizzard.
Mike Griffith will serve as president and chief executive officer of Activision
Publishing, which is to include the Sierra Entertainment, Sierra Online and
Vivendi Games Mobile divisions in addition to the Activision business.
Implying that they intend to "leave well enough alone", Mike Morhaime
is to keep his executive position, and continue to serve as president and chief
executive officer of Blizzard Entertainment.