Following the announcement yesterday that Activision and Vivendi are joining forces, speculation about what that may mean for the new company.
Here is a round up of the latest information that we have for the new company, and what the key players have said so far, with notable remarks in italicised text.
The Key Details
Activision Blizzard will be the result of a merger between Activision and Vivendi Games. The new company will act as publisher for existing labels, including Activision, Blizzard and Sierra.
The deal is made up of Vivendi Games (valued at USD 8.1 billion) and USD 1.7 billion in cash on the one hand, and the existing Activision business on the other.
Vivendi will own 52 per cent of the company initially, and up to 68 per cent of the company once a post-closing cash tender offer has been made within five days of closing the transaction.
The deal has been agreed in principle between the two parties, but may take several months to conclude.
Currently no significant staff change is expected at Blizzard or Swordfish Studios as a result of the merger. Until the deal is complete there is no new information expected in that area.
No new product announcements are expected until the deal is concluded, and it is not thought that any existing developments are under threat.
The new company will wield significant strength in PC, console and online gaming sectors, and will initially become the largest publisher in the world as things stand.
The key figures in the new company (all Activision Blizzard positions unless otherwise stated) will be as follows:
Robert Kotick: President and CEO
Bruce Hack: Vice-chairman and chief corporate officer
Mike Griffith: President and CEO of Activision Publishing (Sierra Entertainment, Sierra Online, Vivendi Games Mobile)
Mike Morhaime: President and CEO of Blizzard Entertainment (unchanged)
Thomas Tippl: Chief financial officer
Jean-Francois Grollemund: Chief accounting officer
Additionally the board of directors will comprise 11 people, six of which will be designated by Vivendi, two of which are existing Activision management personnel, and three of which will be appointed from the existing Activision board:
Rene Penisson (chairman)
Robert J Corti
Jean-Bernard Levy, chairman of the Management Board and CEO of Vivendi:
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.
We are excited about the opportunities for Activision Blizzard as a broader entertainment software platform. We believe this transaction will create significant value for Activision Blizzard and Vivendi stockholders. In Activision, we have found a partner with a highly complementary business and strong operating team.
Bobby Kotick and Brian Kelly are industry pioneers, well known for creating shareholder value. The combined strength of the existing management teams at both companies will set the stage for further profitable growth of Activision Blizzard.
We look forward to being an active and supportive majority stockholder in a company that is poised to lead the worldwide interactive entertainment industry in the years ahead.
Rene Penisson, member of the Management Board of Vivendi and chairman of Vivendi Games:
We are very confident that by combining forces, Activision Blizzard will set the highest standards in quality, reputation and profitability, and will bring together the best creative teams in the industry.
The combination of this unique product portfolio with highly professional employees gives us great confidence in the growth prospects for Activision Blizzard.
Robert Kotick, Activision's chairman and CEO:
This is an outstanding transaction for Activision and our stockholders, as well as a pivotal event in the continuing transformation of the interactive entertainment industry.
By combining leaders in mass-market entertainment and subscription-based online games, Activision Blizzard will be the only publisher with leading market positions across all categories of the rapidly growing interactive entertainment software industry and reach the broadest possible audiences.
By joining forces with Vivendi Games, we will become the immediate leader in the highly profitable online games business and gain a large footprint in the rapidly growing Asian markets, including China and Korea, while maintaining our leading operating performance across North America and Europe.
Activision stockholders will benefit from significantly increased earnings power and the recurring nature and predictability of subscription-based revenues, while also having the opportunity, if they choose, to receive $27.50 per share for a portion of their shares in the post-closing tender offer.
Vivendi Games provides Activision with unique strategic and financial benefits and will allow us to leverage our franchises into emerging online opportunities as Blizzard has done so successfully.
Activision has been very focused on margin expansion, and this transaction will meaningfully increase our overall operating margins as we expand our franchises online and in new geographies.
Diversifying our revenue base among subscription-based online, console and PC formats, as well as wireless and casual emerging opportunities, gives us the broadest platform to capitalize on industry growth.
With Blizzard's successful franchises, such as World of Warcraft, StarCraft and an exciting pipeline of yet-to-be announced titles, Vivendi Games' and Blizzard's management team will join with Activision's strong and experienced leaders to become an even more powerful force for innovation in online and offline interactive entertainment across a wide range of platforms.
This transaction also provides a unique relationship with Universal Music Group - the world's largest music company - which will benefit Guitar Hero and further extend our sizable leadership position in music-based games.
Mike Morhaime, president and CEO of Blizzard:
Blizzard's industry-leading PC games business, with a track record of nine consecutive bestsellers and a global subscriber base of more than 9.3 million World of Warcraft players, is an exceptional fit for Activision's highly profitable console games business.
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.