Vivendi (Euronext Paris: VIV) and Activision, Inc. (Nasdaq: ATVI) today
announced the completion of the transaction announced on December 2,
2007 to create Activision Blizzard, as the world’s
most profitable pure-play online and console game publisher. Activision
Blizzard was formed by combining Activision, one of the world’s
leading independent publishers of interactive entertainment, and Vivendi
Games, Vivendi's interactive entertainment business, which includes
Blizzard Entertainment’s® World of Warcraft®, the world’s
#1 subscription-based massively multiplayer online role-playing game.
Activision Blizzard will continue to operate as a public company traded
on
Nasdaq under the ticker ATVI.
Jean-Bernard Lévy, CEO of Vivendi, said: "We
have created the world leader in online and console games with this
transaction and the combined strengths of the two businesses offer
immense growth potential. I am also very confident that, with the new
leadership team in place, the new entity is perfectly positioned to take
advantage of these rapidly developing markets across the globe.”
René Pénisson,
Chairman of Activision Blizzard, added: "We
are delighted that the merger has been completed. We are very excited
about the opportunity for Activision Blizzard to create a broader
entertainment software platform. We are leaders across North America and
Europe and are creating a substantial footprint in the rapidly growing
Asian market. We are determined to ‘think big’!” "The completion of this transaction marks the
beginning of an important new chapter in the history of interactive
entertainment,” said Robert Kotick, President
and Chief Executive Officer of Activision Blizzard. "By
combining leaders in mass-market entertainment and subscription-based
online games, Activision Blizzard has leading market positions across
all categories of the rapidly growing interactive entertainment software
industry. With more than 10.7 million subscribers on World of Warcraft,
and with tens of millions of people playing Guitar Hero,
Activision Blizzard’s games are transcending
the traditional stereotypes and are more popular as a form of
entertainment than ever before. We look forward to building upon our
brands to create value for our shareholders, customers and consumers.” "From the beginning, our goal has been to
make the best games in the world, and this transaction strengthens our
ability to do just that,” said Mike Morhaime,
Blizzard Entertainment cofounder and Chief Executive Officer. "As
part of Activision Blizzard we’ll have the
reach and resources to share our games with an even wider audience --
while maintaining the same approach as always to providing high-quality
entertainment and services to our players.”
In addition to World of Warcraft, the #1 subscription-based
massively multiplayer online role-playing game, the transaction brings
together some of the world’s leading
interactive entertainment franchises including Guitar Hero®,
the #1 family entertainment and #1 music-based franchise; Call of
Duty®, the #1 first-person action
franchise; Tony Hawk, the #1 action sports franchise; Spider-Man,
the #1 Super Hero franchise; Cabela’s®,
the #1 sports hunting franchise; and two of the top-ten kids movie-based
franchises, Shrek and Madagascar™,
for calendar year 2005 through 2007 according to the NPD Group,
Chart Track and The GFK Group.
The transaction was approved by Activision’s
stockholders at a special stockholder meeting on July 8, 2008 and closed
on July 9, 2008.
Structure and Terms of the Transaction
Under the terms of the agreement, Vivendi Games merged with a wholly
owned subsidiary of Activision and shares of Vivendi Games were
converted into approximately 295.3 million new shares of Activision
common stock. Concurrently with the merger, Vivendi purchased
approximately 62.9 million newly issued shares of Activision common
stock at a price of $27.50 per share for a total of approximately $1.7
billion in cash, resulting in a total Vivendi ownership stake in
Activision Blizzard of approximately 52% on a fully diluted basis and
approximately 54% of shares outstanding.
In accordance with the terms of the agreement, within five business days
of the closing of the transaction, Activision Blizzard will launch a $4
billion all-cash tender offer to purchase up to 146.5 million Activision
Blizzard common shares at $27.50 per share. To the extent that
Activision's stockholders participate in the tender offer, the tender
offer may be funded with Activision Blizzard’s
available cash on hand at closing, borrowings made under credit
facilities from Vivendi, and proceeds from the issuance of additional
shares to Vivendi for up to $700 million. If the tender offer were fully
subscribed, Vivendi would own an approximate 68% ownership stake in
Activision Blizzard on a fully diluted basis.
The transaction is expected to be immediately accretive in its first
year post-closing for Activision’s
stockholders on a non-GAAP basis excluding equity-based compensation,
one time costs related to the transaction, the impact of purchase price
accounting related adjustments including amortization of intangibles,
and the impact of the change in deferred net revenues and cost of sales
related to online-enabled games.
Both Activision and Blizzard Entertainment’s
businesses have maintained their momentum and Activision Blizzard is
well positioned to exceed the financial goals set for the combined
company at the time of the deal announcement.
Board & Management
The Board of Directors of Activision Blizzard consists of eleven
members: six directors designated by Vivendi, two Activision management
directors and three independent directors from Activision’s
board of directors. René Pénisson,
a member of the Management Board of Vivendi and Chairman of Vivendi
Games, will serve as Chairman of Activision Blizzard. Brian Kelly,
Co-Chairman of Activision, will serve as Co-Chairman of Activision
Blizzard. The three independent directors are Richard Sarnoff, Robert J.
Corti and Robert Morgado. Other Activision Blizzard directors
will be Robert Kotick (President and Chief Executive Officer of
Activision Blizzard), Bruce Hack (Vice-Chairman and Chief Corporate
Officer of Activision Blizzard), Jean-Bernard Lévy
(Chairman of the Management Board and Chief Executive Officer of
Vivendi), Doug Morris (Member of the Management Board of Vivendi and
Chairman and Chief Executive Officer of the Universal Music Group),
Philippe Capron (Member of the Management Board and Chief Financial
Officer of Vivendi), and Frédéric
Crépin (Senior Vice President, Head of Legal
Department of Vivendi).
Activision Blizzard is drawing on an accomplished group of leaders from
both companies: Robert Kotick is President and Chief Executive Officer
of Activision Blizzard. Mike Griffith is serving as President and Chief
Executive Officer of Activision Publishing, which includes the Sierra
Entertainment, Sierra Online and Vivendi Games Mobile divisions in
addition to the Activision business.
Bruce Hack, who served as Chief Executive Officer of Vivendi Games, is
Vice-Chairman and Chief Corporate Officer of Activision Blizzard,
accountable for leading the merger integration and the finance, human
resources and legal functions. Blizzard Entertainment cofounder, Mike
Morhaime, will continue to serve as President and Chief Executive
Officer of Blizzard Entertainment. Thomas Tippl, formerly Chief
Financial Officer of Activision Publishing, has been appointed Chief
Financial Officer of Activision Blizzard and Jean-François
Grollemund, Chief Financial Officer of Vivendi Games, has been appointed
Chief Merger Officer of Activision Blizzard.
Portfolio of Video Games and Franchises
Activision Blizzard’s portfolio includes
best-selling video games such as Guitar Hero®,
Call of Duty®, and Tony Hawk,
as well as Spider-Man™, X-Men™,
Shrek®, James Bond™
and TRANSFORMERS™, leading franchises
such as Crash Bandicoot™ and Spyro™
and Blizzard Entertainment’s® StarCraft®, Diablo®,
and Warcraft® franchises including the
global #1 subscription-based massively multi-player online role-playing
game, World Of Warcraft®. About Activision Blizzard
Headquartered in Santa Monica, California, Activision Blizzard, Inc. is
a worldwide pure-play online and console game publisher with leading
market positions across all categories of the rapidly growing
interactive entertainment software industry.
Activision Blizzard maintains operations in the U.S., Canada, the United
Kingdom, France, Germany, Ireland, Italy, Sweden, Spain, Norway,
Denmark, the Netherlands, Romania, Australia, Chile, India, Japan China,
Taiwan and South Korea. More information about Activision Blizzard and
its products can be found on the company's website, www.activisionblizzard.com.
Important Additional Information has been and will be filed with the SEC
THIS DOCUMENT IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT AN OFFER TO
BUY OR THE SOLICITATION OF AN OFFER TO SELL ANY SECURITIES. THE
SOLICITATION AND THE OFFER TO BUY SHARES OF ACTIVISION BLIZZARD’S
COMMON STOCK WILL ONLY BE MADE PURSUANT TO AN OFFER TO PURCHASE AND
RELATED MATERIALS THAT ACTIVISION BLIZZARD INTENDS TO FILE WITH THE SEC.
ONCE FILED, ACTIVISION BLIZZARD STOCKHOLDERS SHOULD READ THESE MATERIALS
CAREFULLY PRIOR TO MAKING ANY DECISIONS WITH RESPECT TO THE OFFER
BECAUSE THEY CONTAIN IMPORTANT INFORMATION, INCLUDING THE TERMS AND
CONDITIONS OF THE OFFER. ONCE FILED, ACTIVISION BLIZZARD STOCKHOLDERS
WILL BE ABLE TO OBTAIN THE OFFER TO PURCHASE AND RELATED MATERIALS WITH
RESPECT TO THE OFFER FREE OF CHARGE AT THE SEC’S
WEBSITE AT HTTP://WWW.SEC.GOV, OR FROM
THE INFORMATION AGENT NAMED IN THE TENDER OFFER MATERIALS.
Cautionary Note Regarding Forward-looking
Statements: Information in this press release that involves
Activision Blizzard’s expectations, plans,
intentions or strategies regarding the future are forward-looking
statements that are not facts and involve a number of risks and
uncertainties. In this release, they are identified by references to
dates after the date of this release and words such as "outlook”, "will,” "remains,” "to be,” "plans,” "believes”, "may”,
"expects,” "intends,”
and similar expressions. Factors that could cause Activision Blizzard’s
actual future results to differ materially from those expressed in the
forward-looking statements set forth in this release include, but are
not limited to, sales of Activision Blizzard’s
titles in its fiscal year 2009, shifts in consumer spending trends, the
seasonal and cyclical nature of the interactive game market, Activision
Blizzard’s ability to predict consumer
preferences among competing hardware platforms (including
next-generation hardware), declines in software pricing, product returns
and price protection, product delays, retail acceptance of Activision
Blizzard’s products, adoption rate and
availability of new hardware and related software, industry competition,
rapid changes in technology and industry standards, protection of
proprietary rights, maintenance of relationships with key personnel,
customers, vendors and third-party developers, domestic and
international economic, financial and political conditions, foreign
exchange rates, integration of recent acquisitions and the
identification of suitable future acquisition opportunities, Activision
Blizzard’s success in integrating the
operations of Activision and Vivendi Games in a timely manner, or at
all, and the combined company’s ability to
realize the anticipated benefits and synergies of the transaction to the
extent, or in the timeframe, anticipated. Other such factors include the
further implementation, acceptance and effectiveness of the remedial
measures recommended or adopted by the special sub-committee of
independent directors established in July 2006 to review historical
stock option granting practices by Activision Blizzard and its board of
directors, the finalization of the tentative settlement of the SEC's
formal investigation and final court approval of the proposed settlement
of the derivative litigation filed in July 2006 against certain current
and former directors and officers of Activision Blizzard relating to
Activision Blizzard's stock option granting practices, and the
possibility that additional claims and proceedings will be commenced,
including additional action by the SEC and/or other regulatory agencies,
and other litigation unrelated to stock option granting practices and
any additional risk factors identified in Activision Blizzard’s
most recent annual report on Form 10-K and quarterly reports on Form
10-Q and the definitive proxy statement filed on June 6, 2008 in
connection with the proposed transaction with Vivendi. The
forward-looking statements in this release are based upon information
available to Activision Blizzard as of the date of this release, and
Activision Blizzard assumes no obligation to update any such
forward-looking statements. Forward-looking statements believed to be
true when made may ultimately prove to be incorrect. These statements
are not guarantees of the future performance of Activision Blizzard and
are subject to risks, uncertainties and other factors, some of which are
beyond its control and may cause actual results to differ materially
from current expectations.
