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Mega-merger: Vivendi + Activision


dogbert
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Big shocker for a Sunday - Activision + Vivendi Universal Games (VUG) merging...

 

In a deal that would create the world's largest video game publisher, Santa Monica-based Activision Inc. has agreed to merge with Vivendi Games in a transaction valued at $9.8 billion, the companies announced today.

 

Vivendi, a French water company, will pay $1.7 billion in cash and contribute its Southern California-based games business, valued at $8.1 billion, in exchange for a 52% stake in Activision. The combined business, to be named Activision Blizzard, would remain a public company and continue to be run by its current chief executive, Bobby Kotick.

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This is a shocker as far as I'm concerned. This isn't a publisher buying a development studio (or studios), which is normally what happens in this industry - large scale acquisitions of publishers is rare, especially on this scale. Neither company was in any sort of financial trouble either.

 

I'm curious how much of the publishing side will be merged or disposed of, as that's where there's the most duplication in the two structures (ignoring management of course).

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Activision Blizzard is a terrible name. They should just use Activison since it's a well known name in the games industry, and keep Blizzard as Blizzard. Blizzard's name should not be slapped onto copies of Tony Hawk, Call of Duty and Spyro. When I read that I wondered if it was December Fools day.

 

Other then that.... jeepers. That's a pretty substantial merger.

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Good ol' Activision have set up a website about the merger for their employees to get information etc. Except they made it public instead of on their intranet. Here's the text of the letter being sent to all employees:

 

Dear Fellow Employee,

 

As you may have already seen, today our Company announced we are going to combine with Vivendi Games to create Activision Blizzard. I would first like to let you know that this is a very compelling opportunity, one that I am thrilled to be a part of, that positions us for sustainable leadership in our industry.

 

Vivendi Games is the undisputed leader in subscription based PC games with Blizzard’s World of Warcraft, in addition to other popular franchises such as Diablo, Starcraft, Crash Bandicoot and Spyro. They have a major footprint in Asia, including China and Korea, and also have operating divisions in mobile and casual games.

 

Our product portfolios and geographic development are highly complementary and together we make a powerful combination with 2007 estimated pro forma revenues of over $3.8 billion. Activision Blizzard will be enviably positioned to compete across all categories of the rapidly growing video games business and will reach the broadest global consumer base in the industry.

 

Structurally, Activision Blizzard will continue to be a publicly traded company with a broad shareholder base – as we are today. At the close of this transaction, Vivendi will become Activision Blizzard’s majority shareholder holding between 52% and 68% (depending on the results of the tender offer) of Activision’s stock. The rest of our shares will be held by a number of institutional and private investors and will continue to be traded on the NASDAQ exchange.

 

We expect a smooth transition, thanks in part, to the continued role of our experienced leadership team. Brian Kelly will continue to serve as Co-Chairman of the Board, Bobby Kotick will continue to serve as Chief Executive Officer of Activision Blizzard and I will continue to serve in my same role as President and Chief Executive Officer of Activision Publishing. Bruce Hack, current Chief Executive Officer of Vivendi Games, will join Activision Blizzard as Vice Chairman and Chief Corporate Officer.

 

This is a significant announcement for both Activision and Vivendi Games and I’m sure you’ll have many questions about it. Today’s announcement marks the beginning of the process, with the completion of the transaction expected in the first half of 2008. Following the close of the transaction, the critical work of integrating the two companies will begin.

 

As part of our strategy to make Activision a great place to work, we are committed to communicating with you regularly. Tomorrow, you will have the opportunity to meet with your local leadership to learn more about the transaction. In the meantime, attached you will find a copy of the press release and a “Frequently Asked Questions” document that may answer some of your initial questions.

 

We have created a dedicated website, http://www.activisionemployees.com, which will serve as a central source of information regarding the transaction. Through the website, you can ask—and we will respond to – transaction related questions.

 

We all recognize the news of this transaction is very significant for the industry and will attract media attention. If you receive any media inquires regarding today’s announcement, please direct them to Maryanne Lataif at 310-255-2704.

 

In closing, it is very important that we all stay focused during the busy holiday season. It is essential that we keep driving toward achieving our plan during this critical period for our business.

 

This is an exciting time for both companies. We believe our world-class organizations will be even stronger together and provide greater opportunities for our customers, our stockholders, and, most importantly, our employees.

 

We look forward to updating you on our activities and progress in the weeks ahead.

 

Best regards,

 

Mike Griffith

President and Chief Executive Officer, Activision Publishing, Inc.

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When will Vivendi learn. A few years ago their CEO spearheaded a ton of acquisitions including my company, then the stockholders got pissed, dumped the CEO, and they had to dump and sell off a ton of their acquisitions in short order, including my company, and it was a big huge mess. Now their buying one of the biggest game publishers in the industry?

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I'm surprised Blizzard isn't breaking out on their own during this. It's not like they don't have the money to go it alone now.
Unless they pulled a Bungie, which was unprecedented, how could they. Blizzard is almost too big now I think to pull something like that. If some of the top people threatened to leave if Blizzard couldn't split off, Vivendi would say "Go ahead, we still have the WoW publishing deal and the vast majority of people who maintain it."
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Besides, Blizzard's name is part of the new company so they can't leave. ;)

 

I remember playing the first Warcraft on my 75mHz Packard Bell PC back in the day. It's pretty amazing to now see Blizzard so highly thought of to get their name on such a massive company.

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  • 7 months later...
Vauge comment. :confused: At the very least you could supply a link to what you are referring.

 

All that's doing the rounds right now are rumours of layoffs at various development studios owned by VUG, with reorganisations of projects, people etc around key projects and franchises. I haven't seen a post I can link to, sorry JTello.

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Sierra which had the Bourne game not do so good

 

Sierra's one of the publishing wings of VUG. Bourne was developed by the wholly owned High Moon. Other studios include Radical, Swordfish and Massive. Sierra is heavily involved with third party developers for games like Ghostbusters.

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Here comes the news.

 

Additionally, Activision Publishing announced that the company intends to adapt the Vivendi Games' studio operations to better align the studio structure against the new product slate. The company will realign staffing at Radical Entertainment and High Moon Studios and is exploring options regarding Massive Entertainment and Swordfish Studios, including the possibility of divestiture.

 

The company also is evaluating options regarding two non-strategic business units Vivendi Games Mobile and Sierra Online, which provides casual games for the PC and Xbox? Live? Marketplace, including the possibility of divesting these business units.

 

Divesting means selling the unit or its iPs, not necessarily as a full staffed going concern I imagine.

 

[added]

Oh and there's some notable games not listed in that PR as being picked by by the new and improved Actiblizzard...

 

Activision announced today that it would be taking a handful of titles formerly published by (and planned to be published by) Sierra and add them to its own product portfolio. Games in the Crash Bandicoot, Ice Age and Spyro the Dragon series will join the Activision family of published titles, with Prototype and an unnamed, unannounced fifth title to rest in the shade of the mega publisher's wing.

 

What's missing from that list? Loads of Sierra titles. Ghostbusters: The Video Game and Br?tal Legend to name two. WET and Chronicles of Riddick: Assault on Dark Athena to name two more. Want another? 50 Cent: Blood on the Sand.

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