Activision Blizzard Splits From Vivendi in $8.2 Billion Deal

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Avatar image for rorie
Posted by Rorie (3951 posts) -
Why is Bobby smiling? (Hint: it's because he's massively wealthy.)
Why is Bobby smiling? (Hint: it's because he's massively wealthy.)

Companies generally tend to join together rather than grow apart. Mergers and acquisitions are far, far more common than a company actually splitting up into smaller pieces. There are exceptions everywhere, of course, but for every example like Bungie splitting away from Microsoft, there are dozens more about developers being gobbled up by a publisher. Which is one reason today's news about Activision Blizzard is so startling: in a $8.2 billion deal, the company's management has bought its freedom from the huge French company Vivendi. As of today, Activision Blizzard is an independent company.

The New York Times has plenty of details on the financial aspects of the deal, in which Vivendi will retain a 12% ownership stake in Activision Blizzard. Activision Blizzard will retain its current leadership of Bobby Kotick (CEO) and Brian Kelly (chairman). Kotick, for his part, seems optimistic about the future, as he probably should be, considering he was likely the driving force behind the split:

“We should emerge even stronger,” he said. “The transactions announced today will allow us to take advantage of attractive financing markets while still retaining more than $3 billion cash on hand to preserve financial stability.”

It's difficult to tell what this means for the future of Activision Blizzard, but at a first glance, it's probably best to guess "not much," at least from a consumer perspective. Without the oversight and red tape of a megacorporation like Vivendi above it, it's tempting to imagine that Activision Blizzard will be able to take more risks and experiment more when it comes to their game brands, but let's not kid ourselves: even without Vivendi looking over their shoulders, Activision Blizzard is still a gargantuan gaming entity. There's still going to be a Call of Duty every year, World of Warcraft will still remain the biggest MMO on the market for the foreseeable future, and the company will likely still try to make the safest bets on its megafranchises as we head into a new console generation. But it'll be interesting to see if being independent will encourage them to behave any differently than they have in the past.

Staff
Avatar image for lashe
#1 Posted by Lashe (1405 posts) -

Wow.

Avatar image for qblivion
#2 Posted by Qblivion (85 posts) -

Go to bed, Rorie.

Avatar image for finaldasa
#3 Posted by FinalDasa (2989 posts) -
Moderator
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#4 Posted by Royce_McCutcheon (261 posts) -

Probably the first step into buying up stuff and becoming a giant parent company of their own would be my guess.

Avatar image for zacagawea
#5 Edited by Zacagawea (1677 posts) -

TRICKYYY SCOOOOOOPS.

Oh wait.

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#6 Edited by TechHits (1483 posts) -

lol Activision Blizzard is an indie dev.

Avatar image for clonedzero
#7 Posted by Clonedzero (4206 posts) -

Well shit, scoops!

But in Rorie context saying "scoops" might imply those silly puppy poop shovels people scoop up poop with. I don't want Rorie being implicated in puppy poo. (unless he's into that. no judgements)

RORIE REPORTS.

there we go! Good job rorie!

Avatar image for yukoasho
#8 Edited by yukoasho (2248 posts) -

So, what happens to Vivendi now? Do they just exit gaming entirely? Do they form another publishing arm?

Avatar image for mechakirby
#9 Edited by mechakirby (448 posts) -

Does this mean Crash Bandicoot is now a free agent or what?

Avatar image for rorie
#10 Posted by Rorie (3951 posts) -

@yukoasho: I have a feeling they were just looking to get out of gaming entirely. I'm betting their small investment in the new A/B is good enough for them for now.

Staff
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#11 Posted by Colourful_Hippie (5588 posts) -
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#12 Posted by Example1013 (4854 posts) -
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#13 Posted by Juda (47 posts) -

btw if you dislike the french so much, feel free to knock down the greatest sign of american-ism there is, since the french gave it to you. Yea, the statue of liberty.

Avatar image for colourful_hippie
#14 Edited by Colourful_Hippie (5588 posts) -

@juda said:

btw if you dislike the french so much, feel free to knock down the greatest sign of american-ism there is, since the french gave it to you. Yea, the statue of liberty.

It's a joke dude, calm down. Sounds like you need to go to bed too.

Avatar image for wilshere
#15 Posted by Wilshere (408 posts) -

Day one DLC for everybody!

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#16 Posted by Malarkain (139 posts) -

Now Activision Blizzard just needs a few years and they can buy EA!

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#17 Posted by sissylion (677 posts) -

8.2 billion fucking dollars. I declare that to be an illegal amount of money.

Avatar image for stimpack
#19 Posted by Stimpack (1004 posts) -

What? What?

Avatar image for drdarkstryfe
#20 Posted by DrDarkStryfe (1989 posts) -

This is pretty major news. Vivendi could not unload Activision Blizzard after trying for over a year, and there was a risk that they could have broken them up and sell it off piecemeal. It will be interesting to see if things will be different now that they do not have to answer to a conglomerate that was in financial turmoil.

Avatar image for starvinggamer
#21 Edited by StarvingGamer (11262 posts) -
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#22 Posted by thainatos (230 posts) -

Holy shit.

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#23 Posted by kkotd (357 posts) -

This is actually probably the best news that Activision Blizzard Inc. have seen in a while. Black Ops 2 while selling alot, wasn't the crazy hit they wanted and WoW is down to 7mil people. This on top of formed Blizzard designers being told that Vivendi was more intrusive than Activision ever could be... Yeah, taking them out of the picture is nothing but a good thing.

Avatar image for siphillis
#24 Posted by Siphillis (1352 posts) -

What a wonderful headline.

Avatar image for hailinel
#25 Posted by Hailinel (25787 posts) -

Oh my stars and garters.

Avatar image for slab64
#26 Posted by Slab64 (1139 posts) -

MY FIGHT MONEYYY

Avatar image for rorie
#27 Posted by Rorie (3951 posts) -

@juda: That was totally a joke! I was more playing on the notion of COD players probably being the same kind of people who make surrender jokes about French people. Hard to parse that out in such a small window of text, I know.

Trust me, I love the French. I don't think most Americans know that there probably wouldn't be a U.S. without the French intervention in the Revolutionary War. Consider me a Francophone. Er, Francophile. Or whatever.

Staff
Avatar image for sweep
#28 Posted by Sweep (10130 posts) -

3 billion in cash to retain stability? Is that a lot? I mean... relatively speaking? Because it sounds like a lot.

When people start talking about numbers that high I just automatically substitute those numbers for dollar signs.

Moderator
Avatar image for yukoasho
#29 Posted by yukoasho (2248 posts) -

@rorie said:

@yukoasho: I have a feeling they were just looking to get out of gaming entirely. I'm betting their small investment in the new A/B is good enough for them for now.

Can't help but wonder why they were set to leave a super-profitable company, though. Other posts here suggest that Vivendi is in trouble... Maybe they needed some quick money for some reason...?

Avatar image for colourful_hippie
#30 Posted by Colourful_Hippie (5588 posts) -
Avatar image for amyggen
#31 Edited by AMyggen (7451 posts) -

@juda said:

btw if you dislike the french so much, feel free to knock down the greatest sign of american-ism there is, since the french gave it to you. Yea, the statue of liberty.

You've got to be kidding me...

Avatar image for agamemnon
#32 Posted by Agamemnon (32 posts) -

So. . . Blizzard is firmly in the clutches of Activision then. Oh joy.

Avatar image for crimsonlordofwar
#33 Edited by crimsonlordofwar (143 posts) -

So does this mean I don't have to hear about CoD 24/7 on gametrailers

Avatar image for zombiepie
#34 Posted by ZombiePie (6789 posts) -

I bet you that Vivendi moves to sell their stake in Universal Music Group soon as well.

Moderator
Avatar image for rpgee
#35 Posted by rpgee (775 posts) -

First time I read 8.2 billion dollars, it went straight past my head. Now I can't read it without going "That is so much money!"

My word, that's a lot of money.

Avatar image for librorumprohibitorum
#36 Edited by LibrorumProhibitorum (437 posts) -

All it takes is a single mistake and you wont have that "financial stability" anymore.

Avatar image for demoskinos
#37 Posted by Demoskinos (17293 posts) -
Avatar image for blu3v3nom07
#38 Edited by Blu3V3nom07 (4345 posts) -

Fuck, again. I bet this is gonna take a while for the money to settle. I think I'm buying Ghosts this year. :)

Avatar image for rudetrooper
#39 Posted by RudeTrooper (33 posts) -

who cares???????

will it make any of the games better or worse? no!

a few big stock owners cashed out before others knew what happened.

start the death clock when people/investors realize WoW and CAD has moved out of popularity

Avatar image for adaptor
#40 Posted by Adaptor (219 posts) -

Sounds like a good thing to me. Slightly less giant conglomerates are better for consumers in the long run.

Avatar image for oldirtybearon
#41 Edited by Oldirtybearon (5626 posts) -

I remember hearing word that the deal ActiBlizz made with Vivendi was coming to a head soon. The article wondered aloud just how much ActiBlizz would pay Vivendi to get the fuck away from that toxic hell hole. I had no idea that they'd be willing to spend $8.2 billion, but apparently the ransom was worth paying.

Very interesting to see where this company goes from here.

Avatar image for sonofseth
#42 Posted by SonofSeth (112 posts) -

@juda said:

btw if you dislike the french so much, feel free to knock down the greatest sign of american-ism there is, since the french gave it to you. Yea, the statue of liberty.

And this is why no one likes the french.

Avatar image for eurobum
#43 Posted by Eurobum (304 posts) -

A note on why this is happening. Activision had "had $4.3 billion in cash and cash equivalents at the end of March, but $2.7 billion is held offshore and would be subject to U.S. taxes if repatriated, according to company filings." [Source]

So they took approximately 4.6 Billion in loans, in order to not pay tax now or ever, going from a most profitable company to one that is ravaged by debt (at least on paper). Vivendi was happy to dump them as the price and success of Blizzard is likely to have peaked or maybe they just needed cash.

For the new investors buying an indebted company is very attractive as it still may increase in stock price, even without massive profits.

Personally I never quite understood why exactly it's better to pay to the banks rather than the tax man, I guess the answer is that you get a much better deal. All that money that ended up in France, in turn "Laid low by struggles at its main telecommunications unit, Vivendi has begun selling off stakes in various companies to pay down debt and help refashion itself into a leaner media company." [Source]

Another thing I'm ignorant about is whether or not it is legal for banks to both lend money to and hold shares of a company like Blizzard. Still the question remains on how these guys cash out the profits, they probably spend and overcharge the expenses in countries where the tax rate is low, in countries with outsourced development studios.

Avatar image for paparoach
#44 Posted by paparoach (98 posts) -
Loading Video...

my opinion

Avatar image for kanerobot
#45 Edited by KaneRobot (2641 posts) -
@juda said:

btw if you dislike the french so much, feel free to knock down the greatest sign of american-ism there is, since the french gave it to you

The French did not give the United States the American flag. Now go chill the fuck out for a while and reevaluate if you should be coming to this particular site with your lack of any sense of humor.

Avatar image for abendlaender
#46 Edited by Abendlaender (3054 posts) -

So....ermm does this mean anything? Probably not right? At least for "us"

Avatar image for ironscimitar
#47 Posted by IronScimitar (551 posts) -

stalks.

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#48 Posted by Winternet (8377 posts) -

What does Vivendi even do in this day and age?

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#49 Posted by Sackmanjones (5397 posts) -
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#50 Posted by Amducious (404 posts) -

A Rorie Story.

Cool.

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