GamerNode: News - Blizzard and Activision merge in $18 billion deal

Blizzard and Activision merge in $18 billion deal

Category: Industry, Posted: 12/02/2007 at 12:39PM EST by Billy Wang, Contributor

blizzlogo In a move that'll shake the gaming industry, BBC News revealed that Blizzard Entertainment will merge with Activision to form "the world's most profitable games business."

As a result, Activision will henceforth be called Activision Blizzard and the deal is worth to be $18.8 billion.

Blizzard will invest $2 billion into Activision Blizzard while Activision will invest $1 billion. Activision's current CEO, Bobby Kotick, will become CEO of the new company and Vivendi Universal, the parent owner of Blizzard, will remain the biggest shareholder in the company by retaining 52% of the shares.

Jean-Bernard Levy, CEO of Vivendi, said, "This alliance is a major strategic step for Vivendi and is another illustration of our drive to extend our presence in the entertainment sector. By combining Vivendi's games business with Activision, we are creating a worldwide leader in a high-growth industry."

Mike Morhaime, CEO and president of Blizzard, said, "From our interactions with the Activision team, it is clear we have much in common in terms of our approaches to game development and publishing. Above all, we are looking forward to continue creating great games for Blizzard gamers around the world, and we believe this new partnership will help us to do that even better than before."

Blizzard Entertainment is the developer of World of Warcraft, a 9+ million subscriber MMORPG, along with several classic RTS and RPG games under its belt. Activision is a top-ranked games publisher whose notable franchises include Guitar Hero, Tony Hawk and Call of Duty.

The deal also includes Universal Music Group -- the world's largest music company -- and will give future Guitar Hero titles a backing possibly stronger than Rock Band's alliance with MTV.

On Monday, the management of both companies will be holding a live conference call for investors at 8:30 AM EST, 2:30 PM Paris time, and and 1:30 PM London time. You can call in and listen live by dialing into (888) 765-5554 in the U.S. or (913) 312-1235 outside the U.S. The live webcast of the call can be accessed at www.vivendi.com and www.activision.com.

For those unable to listen to the live conference call, an audio replay of the call will be available through December 17, 2007, approximately two hours after the call's conclusion and can be accessed by calling (888) 203-1112 in the U.S. or (719) 457-0820 outside the U.S. and entering the pass-code: 5648597. In addition, a webcast replay also will be archived on the Investor Relations section of each company's website.

Whether you like this or not, this is a huge step in the gaming market considering that both companies have dominant positions in the market. So what's next, Call of Warcraft? World of Duty?

Brendon's edit: Blizzard has just put up their press release on it, and I've thrown in some additional info. If you want to read through several pages of business jargon and positive quotes from anyone with a fancy job title at Blizzard and Activision to get more, check it out here.

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Posted by OWNAGE TIME on 12/02/2007 at 12:56PM

wow, did not see that coming

Posted by JTower on 12/02/2007 at 01:09PM

wow, are my eyes for real? wtf?

Posted by lskennedy on 12/02/2007 at 01:11PM

As long as the next guitar hero is "Guitar hero 4: Lord of Destruction" and i swear if the GH formula gets screwed up any more then it already was for gh3, i have lost faith in gaming all around.

Posted by JTower on 12/02/2007 at 01:23PM

Sigh, What a TERRIBLE name "Activision Blizzard". Minds well just call it "Blizzvision".

Posted by Requiem on 12/02/2007 at 01:54PM

Wow, talk about a strange alliance. Blizzard slowly dominates all...

Posted by Nolite on 12/02/2007 at 01:55PM

Wow! Just... wow! Hope they'll be able to stand up against EA and Ubisoft in the future then.

Posted by Archem on 12/02/2007 at 02:10PM

My stomach just turned... KEEP YOUR DAMN WOW OUT OF MY COD AND TONY HAWK!!!

Posted by Vincent on 12/02/2007 at 02:24PM

That's odd.

Posted by Brendon on 12/02/2007 at 02:26PM

Wow. I have a LOT of rumors I've been hearing about both companies lately... But I did NOT see this coming. At all.

Posted by JTower on 12/02/2007 at 02:35PM

"Wow! Just... wow! Hope they'll be able to stand up against EA and Ubisoft in the future then."
They always were able to stand up against EA, and Ubisoft. They just got smaller anyways :P

Posted by Vinie on 12/02/2007 at 04:22PM

Correct me if i'm wrong, but Blizz is a developer (owned by Vivendi) and Activision is just a publisher nowdays, so... does this mean that Blizz is going to publish games now and that Activision is going to start to develop games?

I'm confused

Posted by JTower on 12/02/2007 at 05:03PM

Taken straight out of the wow forums, by a blizz employee.

Q: What are the details of the deal?
A: Under the terms of an agreement with Vivendi, Blizzard and the other companies that make up Vivendi Games will combine with Activision to form a new public company called Activision Blizzard. We do not anticipate any difference in Blizzard’s operations as a result of the combination. Joining forces with Activision will create a stronger and more diversified company that we anticipate will benefit and strengthen both brands.

Q: What will happen to the Blizzard brand name?
A: The Blizzard brand name will stay the same as it’s always been: Blizzard Entertainment, Inc.

Q: What will change with regard to the day-to-day operations at Blizzard?
A: There will be no changes in the way Blizzard operates. All of the people, processes, and philosophies that have made Blizzard so successful will be preserved. Blizzard will benefit from all-star sales and distribution teams to service our products. In addition, the combined company will be stronger financially, managerially, and operationally.

Q: How will this impact Blizzard’s games?
A: This will not impact Blizzard’s games. We remain committed to providing the same high-quality game content and support that we always have. Development on Wrath of the Lich King and StarCraft II, as well as on our unannounced games, is continuing as normal.

Q: Will there be any visible differences in Blizzard’s logo or packaging/marketing materials as a result of this deal?
A: No, there won’t be any changes to our company name, logo, packaging/marketing materials, or anything else along those lines.

Q: Will there be any management changes at Blizzard as a result of this deal?
A: No, there won’t be any management changes at Blizzard as a result of the combination.

Q: Will Activision and Blizzard now share development teams?
A: No, both of our companies will continue to operate as they have previously with regard to game development.

Q: Will the release schedules for any Blizzard games be impacted?
A: No, the transaction will not have any impact on our games, our day-to-day operations, or our release timelines.

Q: Will any of Blizzard’s offices close as a result of the deal? Or, will any new offices open?
A: No, all of our offices will continue to function as they have, and we don’t foresee the need to open any new offices for the time being.

Q: Will any employees move to different offices as a result of the deal?
A: We don’t anticipate making any such moves as a result of the deal.

Q: Does this deal include Activision’s and Blizzard’s international offices?
A: Yes, every part of our companies in the U.S. and abroad is involved in this deal.

Q: If Activision Blizzard is a public company, does that mean I’ll now be able to buy stock in Blizzard?
A: Activision will be renamed Activision Blizzard, Inc and will continue to be a publicly listed company traded on NASDAQ. You will be able to buy stock in the combined company.

Q: When will the transaction be complete?
A: The transaction is subject to approval of Activision shareholders, customary closing conditions, and regulatory approvals. Pending approval, the companies expect the transaction to be completed by mid 2008.

Posted by jambo on 12/02/2007 at 05:13PM

Crikey Moses!

Posted by Vinie on 12/02/2007 at 05:28PM

Wouldn't ActiVendi be a more appropriate name?

Posted by Brendon on 12/02/2007 at 05:31PM

Who here wants to send me a message when the stock for Activision Blizzard becomes available?

Posted by popecodex on 12/02/2007 at 05:58PM

This was a BIG surprise this morning. On the plus side at least my friends who work at Activision should get some nice bonuses out of their stock options.

Posted by JTower on 12/02/2007 at 07:13PM

The stocks already out for $27.50 I think.