Vivendi to Acquire Activision, Forming Activision Blizzard

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Vivendi announced that it intends to merge its Vivendi Games unit (including brands like Sierra and Blizzard) with Activision, forming a new entity to be called Activision Blizzard.
While positioned as a merger, the transaction is essentially an acquisition of Activision by Vivendi, with Vivendi expected to own more than half of Activision Blizzard following the completion of the transaction. Here's how the plan goes: Vivendi Games will be spun off from Vivendi and will be merged with a wholly owned subsidiary of Activision. 295.3 million new shares of Activision common stock will be issued to acquire Vivendi Games. At the same time, Vivendi will purchase 62.9 million newly issued shares of Activision common stock at 27.50 per share ($1.7 billion).

Within five business days of the completion of this transaction, Activision Blizzard will launch a tender offer to purchase up to 146.5 million shares of Activision Blizzard common stock at $27.50 per share in cash. This will be funded from the combined company's cash (including the recent $1.7 billion payment from Vivendi). At this point, Vivendi will acquire another $700 million of Activision Blizzard common stock. Activision Blizzard may borrow additional funds to repurchase these shares. If all goes as planned, Vivendi will own around 68% of Activision Blizzard at the end of the sequence of transactions.

Before this can go ahead, Activision will need shareholder approval (likely given that the per share price is at a premium compared to where Activision has been trading. Activision and Vivendi will also need regulatory approval.

The combined entity will have a Board of Directors comprised of 11 members. Six will be appointed by Vivendi, and five will come from Activision's Board of Directors, including three independent directors. Robert Kotick will become the President and Chief Executive Officer of Activision Blizzard, while Bruce Hack (the current CEO of Vivendi Games) will become Vice Chairman and Chief Corporate Officer. Mike Griffith will be President and Chief Corporate Officer of Activision Publishing (which will include the Sierra Entertainment, Sierra Online and Vivendi Games Mobile labels). Mike Morhaime will continue to be the President and CEO of Blizzard Entertainment.

Assuming all the approvals are forthcoming, the companies expect the acquisition to be completed in the first half of 2008. More information can be found at the online site for Activision Blizzard.

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This page contains a single entry by Editor published on December 2, 2007 10:12 AM.

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