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Activision Blizzard Splits From Vivendi in $8.2 Billion Deal

You can now invest directly in Call Of Duty stock without having to worry about giving money to French people.

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.

122 Comments
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Posted by Lashe

Wow.

Posted by Qblivion

Go to bed, Rorie.

Posted by FinalDasa
Moderator Online
Posted by Royce_McCutcheon

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

Edited by Zacagawea

TRICKYYY SCOOOOOOPS.

Oh wait.

Edited by TechHits

lol Activision Blizzard is an indie dev.

Posted by Clonedzero

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!

Edited by YukoAsho

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

Edited by MechaKirby

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

Posted by Rorie

@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
Posted by Colourful_Hippie
Posted by Example1013
Posted by Juda

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.

Edited by Colourful_Hippie

@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.

Posted by Wilshere

Day one DLC for everybody!

Posted by Malarkain

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

Posted by sissylion

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

Posted by Stimpack

What? What?

Posted by DrDarkStryfe

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.

Edited by StarvingGamer
Posted by thainatos

Holy shit.

Posted by kkotd

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.

Posted by Siphillis

What a wonderful headline.

Posted by Hailinel

Oh my stars and garters.

Online
Posted by Slab64

MY FIGHT MONEYYY

Posted by Rorie

@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
Posted by Sweep

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
Posted by YukoAsho

@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...?

Posted by Colourful_Hippie
Edited by AMyggen

@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...

Posted by Agamemnon

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

Edited by crimsonlordofwar

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

Posted by ZombiePie

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

Moderator
Posted by RPGee

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.

Edited by LibrorumProhibitorum

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

Posted by Demoskinos
Edited by Blu3V3nom07

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

Posted by RudeTrooper

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

Posted by Adaptor

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

Edited by Oldirtybearon

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.

Posted by SonofSeth

@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.

Posted by Eurobum

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.

Posted by paparoach

my opinion

Edited by KaneRobot
@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.

Edited by Abendlaender

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

Posted by IronScimitar

stalks.

Posted by Winternet

What does Vivendi even do in this day and age?

Posted by Sackmanjones
Posted by Dick_Mohawk

A Rorie Story.

Cool.

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