By Hector Cortez Jul 10, 2008, 15:20 GMT
Vivendi and Activision today announced the completion of the transaction announced on December 2, 2007 to create Activision Blizzard, as the world's most profitable pure-play online and console game publisher. Activision Blizzard was formed by combining Activision and Vivendi Games, Vivendi's interactive entertainment business, which includes Blizzard Entertainment's World of Warcraft, the world's #1 subscription-based massively multiplayer online role-playing game. Activision Blizzard will continue to operate as a public company traded on Nasdaq under the ticker ATVI.
Vivendi and Activision today announced the completion of the transaction announced on December 2, 2007 to create Activision Blizzard.
In addition to World of Warcraft, the transaction brings together some of the world's leading interactive entertainment franchises including Guitar Hero, the #1 family entertainment and #1 music-based franchise; Call of Duty, the #1 first-person action franchise; Tony Hawk, the #1 action sports franchise; Spider-Man, the #1 Super Hero franchise; Cabela's, the #1 sports hunting franchise; and two of the top-ten kids movie-based franchises, Shrek and Madagascar, for calendar year 2005 through 2007 according to the NPD Group, Chart Track and The GFK Group.
The transaction was approved by Activision's stockholders at a special stockholder meeting on July 8, 2008 and closed on July 9, 2008.
Structure and Terms of the Transaction
Under the terms of the agreement, Vivendi Games merged with a wholly owned subsidiary of Activision and shares of Vivendi Games were converted into approximately 295.3 million new shares of Activision common stock. Concurrently with the merger, Vivendi purchased approximately 62.9 million newly issued shares of Activision common stock at a price of $27.50 per share for a total of approximately $1.7 billion in cash, resulting in a total Vivendi ownership stake in Activision Blizzard of approximately 52% on a fully diluted basis and approximately 54% of shares outstanding.
In accordance with the terms of the agreement, within five business days of the closing of the transaction, Activision Blizzard will launch a $4 billion all-cash tender offer to purchase up to 146.5 million Activision Blizzard common shares at $27.50 per share. To the extent that Activision's stockholders participate in the tender offer, the tender offer may be funded with Activision Blizzard's available cash on hand at closing, borrowings made under credit facilities from Vivendi, and proceeds from the issuance of additional shares to Vivendi for up to $700 million. If the tender offer were fully subscribed, Vivendi would own an approximate 68% ownership stake in Activision Blizzard on a fully diluted basis.
The transaction is expected to be immediately accretive in its first year post-closing for Activision's stockholders on a non-GAAP basis excluding equity-based compensation, one time costs related to the transaction, the impact of purchase price accounting related adjustments including amortization of intangibles, and the impact of the change in deferred net revenues and cost of sales related to online-enabled games.
Both Activision and Blizzard Entertainment's businesses have maintained their momentum and Activision Blizzard is well positioned to exceed the financial goals set for the combined company at the time of the deal announcement.
Board & Management
The Board of Directors of Activision Blizzard consists of eleven members: six directors designated by Vivendi, two Activision management directors and three independent directors from Activision's board of directors. René Pénisson, a member of the Management Board of Vivendi and Chairman of Vivendi Games, will serve as Chairman of Activision Blizzard. Brian Kelly, Co-Chairman of Activision, will serve as Co-Chairman of Activision Blizzard. The three independent directors are Richard Sarnoff, Robert J. Corti and Robert Morgado. Other Activision Blizzard directors will be Robert Kotick (President and Chief Executive Officer of Activision Blizzard), Bruce Hack (Vice-Chairman and Chief Corporate Officer of Activision Blizzard), Jean-Bernard Lévy (Chairman of the Management Board and Chief Executive Officer of Vivendi), Doug Morris (Member of the Management Board of Vivendi and Chairman and Chief Executive Officer of the Universal Music Group), Philippe Capron (Member of the Management Board and Chief Financial Officer of Vivendi), and Frédéric Crépin (Senior Vice President, Head of Legal Department of Vivendi).
Activision Blizzard is drawing on an accomplished group of leaders from both companies: Robert Kotick is President and Chief Executive Officer of Activision Blizzard. Mike Griffith is serving as President and Chief Executive Officer of Activision Publishing, which includes the Sierra Entertainment, Sierra Online and Vivendi Games Mobile divisions in addition to the Activision business.
Bruce Hack, who served as Chief Executive Officer of Vivendi Games, is Vice-Chairman and Chief Corporate Officer of Activision Blizzard, accountable for leading the merger integration and the finance, human resources and legal functions. Blizzard Entertainment cofounder, Mike Morhaime, will continue to serve as President and Chief Executive Officer of Blizzard Entertainment. Thomas Tippl, formerly Chief Financial Officer of Activision Publishing, has been appointed Chief Financial Officer of Activision Blizzard and Jean-François Grollemund, Chief Financial Officer of Vivendi Games, has been appointed Chief Merger Officer of Activision Blizzard.
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