ACTIVISION INC AND VIVENDI GAMES TO MERGE INTO ACTIVISION BLIZZARD

Just when it looked like it was safe to go in the boardroom, Activision Incorporated (Guitar Hero) and Vivendi Games (World of Warcraft) have announced that they will be merging into Activision Blizzard – a move that involves some 19 billion dollars and will result in Vivendi gaining a 52 percent interest in the new company.

"December 2, 2007 (Santa Monica, Calif. and Paris, France) – Activision, Inc. (NASDAQ: ATVI) and Vivendi (Euronext Paris: VIV) today announced that they have signed a definitive agreement to combine Vivendi Games, Vivendi's interactive entertainment business — which includes Blizzard Entertainment’s™ World of Warcraft®, the world’s #1 multi-player online role-playing game franchise — with Activision, creating the world’s largest pure-play online and console game publisher. The new company, Activision Blizzard, is expected to have approximately $3.8 billion in pro forma combined calendar 2007 revenues and the highest operating margins of any major third-party video game publisher. On closing of the transaction, Activision will be renamed Activision Blizzard and will continue to operate as a public company traded on NASDAQ under the ticker ATVI." – Activision Blizzard merger announcement

I've got to say that this one is actually a little bit shocking as it would appear that neither company was really in a situation where they needed the assistance of the other. It's also somewhat interesting to see that of all the different companies under Vivendi Games' banner, Blizzard is the one that made the title of the new company. I guess both sides know where the money train is, eh?

The terms of the merger seem fairly intricate, so I won't begin to go into them here in an abbreviated manner. If you're looking for all the details, be sure to check out Activision Blizzard's new website at www.ActivisionBlizzard.com. One thing that I should say right off the bat, is that World of Warcraft fans appear to have nothing to worry about, as according to Blizzard, they will continue to operate as a seperate division of the new company. (and certainly the fact that Blizzard was considered important enough to represent the new company in name indicates both sides are well aware that Blizzard should continue it's operations without interference)

"We're pleased to announce that along with the other companies that make up Vivendi Games, we are merging with Activision to form a new global entertainment organization called Activision Blizzard (pending shareholder and regulatory approval). Similar to our previous arrangement, Blizzard Entertainment will now operate as a division of this new organization.

There will be no changes to our games, our websites, our personnel, or our day-to-day operations as a result of the deal. However, this combining of resources will benefit all of the companies involved and will further strengthen Blizzard's ability to continue delivering high-quality content for our players around the world for many years to come. To learn more about this exciting new development, please read our Activision Blizzard FAQ." – Blizzard.com

I'm also sure Electronic Arts is a bit upset at once again losing the "biggest third party software company" title once again, so be sure to keep an eye out for more possible acquisition announcements in the coming weeks.

• Activision Blizzard – Official website
• Viviendi and Activision to form Activision Blizzard – Official press release
• Activision Blizzard FAQ – Blizzard.com