AFI BLOG: Media and Technology

Vivendi Games Merging With Activision To Create New Pure-Play Video Game ; Valued At $18.9 Billion - paidContent.org

Vivendi (EPA: VIV) SA and Activision (NSDQ: ATVI) announced plans for a merger valued at $18.9 billion that would bring together Guitar Hero, Spider-Man X-Men, and World of Warcraft, among other brands.

– Under the terms, Vivendi would hold a roughly 52 percent majority of the merged company by contributing Vivendi Games, valued at $8.1 billion, and $1.7 billion in cash.

– Vivendi’s contribution includes Blizzard Entertainment, owner of MMORPG WoW, which projects 2007 revenue of $1.1 billion and roughly $520 million profit.

– Activision would then be renamed Activision Blizzard and continue to operate on Nasdaq as ATVI. Within five days of the closing, Activision Blizzard would launch a $4 billion all-cash tender offer to purchase up to 146.5 million Activision shares at $27.50—a 31 percent premium over 20 days and 24 percent of Friday’s close of $22.15; Vivendi has agreed to purchase up to $700 million of new shares at the same price.

– They hope to close the deal in the first half of 2008.