Activision Blizzard To Separate From Vivendi

Posted Jul 27, 2013

Activision Blizzard
and Vivendi has made an $8.2 billion deal to separate.  Activision Blizzard will become an independent company.  Activision Blizzard and a group of investors will be buying shares back that are owned by Vivendi.  Vivendi is a French media company that controls Activision Blizzard.

Activision Blizzard is buying around 429 million of their shares and certain tax attributes from Vivendi for around $5.83 billion in cash ($13.60 per share) according to the New York Times.  Robert Kotick (CEO) and Brian Kelly (co-chairman) are leading a group to buy around 172 million shares of Activision Blizzard from Vivendi for around $2.34 billion.

Vivendi will still own around 12% with 83 million shares.  Kotick will continue leading the company and Kelly will remain as the sole chairman.

Activision Blizzard is known for making hit games like Call of Duty, Diablo, and World of Warcraft.

Kotick bought the company that was turned into Activision in 1990 when it was nearly bankrupt.  He raised money from investors from that point.  About 28 years later, Kotick led one of the largest video game mergers when Activision was combined with Vivendi’s game division, Blizzard Entertainment.

The group of investors that were led by Kotick and Kelly includes Davis Advisors, Leonard Green & Partners, and Tencent.  These investors are expected to have about a 24.9% stake in the company.  Kotick and Kelly are putting in around $100 million.

Activision Blizzard will be financing the deal with around $1.2 billion of cash on hand and around $4.6 billion of debt.  It will be raised through the markets and bank financing.  The company will have around $1.4 billion of net debt after the deal.

Activision Blizzard reported yesterday that they are expecting to report net revenues of around $1.05 billion for Q2 based on GAAP.  The full results are expected to be reported on August 1st.