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Dec 6, 2007

Two Gaming Giants Merge

Two gaming giants, Activision and Vivendi Games, which includes Blizzard Entertainment are merging together and forming one monolithic gaming company called Activision Blizzard. The worth of the deal between two companies is almost $20 billion in which Activision CEO Bobby Kotick will take place as CEO, while Bruce Hack, CEO of Vivendi will become the Chief Corporate Officer of the combined company. In the new company, Vivendi will own approximately 68 percent share.

It is expected that the new company, Activision Blizzard will generate revenue of approximately $3.8 billion this year. Under this deal, the shares of Vivendi Games will be transferred as 295.3 million new shares of Activision common stock. Vivendi will purchase 62.9 million newly issued shares of Activision common stock at a price of $27.50 per share. The focus has been firmly placed on the two entities from which the new company takes its name: Activision and Blizzard.

Both companies are successful in the gaming world and both will bring their expertise to the table. Now, Activision has one of the most profitable online games in the world with World of Warcraft and it is also controlling Blizzard’s other AAA franchises like the upcoming StarCraft 2. World of WarCraft may be reaching market saturation on the PC side of things. With the gigantic launch of the aforementioned StarCraft 2, Blizzard now has the possibility of bringing some of its flagship properties to the console world in an effort to extend its reach.