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Vivendi Games-Activision Merger Announced

Rachel Rosmarin wrote in

In a largely unpredicted move Sunday, Vivendi said it would merge with videogame publisher Activision (nasdaq: ATVI), in a deal that would create the largest independent game company and be worth about $19 billion, according to the companies. By 2009, the companies expect operating income to reach $1.1 billion. The entire videogame industry could generate $47 billion that year, according to DFC Intelligence.

Vivendi's purchase of nearly 63 million newly issued shares of Activision will give Vivendi a 52% stake in the combined company. The new company will be called Activision Blizzard, continue to trade under Activsion's ATVI symbol and Activision Chief Executive Robert Kotick will retain the helm of the combined company.

Earlier in the article, the writer refers to Vivendi Games as a "small but successful gaming division that includes Blizzard Entertainment's 9.3-million subscriber 'World of Warcraft.'" Only Forbes can get away with using the adjective "small" in describing WOW.

Another interesting excerpt:

The purchase of the "Guitar Hero" franchise, which Activision worked out in May 2006 when it acquired Red Octane for $100 million, has proven a shrewd move. The company has other hits, such as World War II epic "Call of Duty IV" and the skateboarding series tied to Tony Hawk, but none has generated the sales or the buzz of "Guitar Hero."

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