Activision To Buy Back Majority Stake From Vivendi in $8.2 Billion Deal

Almost six years ago French mulitnational, Vivendi, gained the majority stake in games publisher Activision for the sum of $9.8 billion, allowing for a 52% majority stake (via). The majority grew but today it has been announced that Activision Blizzard will gain its independence as Bobby Kotick and Brian Kelly lead an investor group to buy back  a total of 600 million shares.

The deal looks like it will be done in two stages. First Activision Blizzard itself will purchase around 429 million shares for $5.8 billion. Then another 172 million shares will be bought by Kotick and Kelly’s investment firm, ASAC II LP, for the sum of $2.34 billion. Bobby Kotick and Brian Kelly have invested $100 million of their own wealth in the investment firm to bolster this deal. These purchases will mean that 25% of Activision Blizzard will be owned by this new investor group.

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Vivendi will retain an 12% stake in the company with 82 million shares. This means 63% of Activision Blizzard shares will be available to the public to purchase. The deal itself will be concluded by September of this year.

Though Activision Blizzard will gain more control for itself it would be surprising if they didn’t stick with proven formulas, like Call Of Duty and Skylanders. There is a bigger risk here having the public own the majority of the shares, which means taking to many risks could upset the bigger investor pool and affect the share prices and funds for the company.

Source: Forbes

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7 Comments

  1. I try to avoid purchasing games from “the big 2”, Activision and EA, as they are systematically stagnating the industry with the same games over and over, making it very difficult for anything new and exciting to emerge.

    • I think this is both true and untrue. Edge wrote an excellent article about the death of the ‘B-Stream’ games in this generation. I’ve tried to find the article online to no avail, but the premise was that the big publishers are so much more afraid of taking a risk on new IPs that they’ve essentially killed a breed of games with relatively high production costs but much less well established markets and demographics. Publishers want profit and profit comes from big name franchises with established teams that know how to produce games that sell. It’s not that hard to see this happening, but games like Remember Me, Asura’s Wrath, Okami etc. continue to sneak out and get good critical response but with much less regularity. So, in that sense, I agree with you.

      The counterpoint to this is the thriving indie scene which is currently seeing such extraordinary press coverage and is literally being squabbled over by Microsoft and Sony. I can’t remember a generation in gaming where I’ve seen such a richly diverse selection of amazing games, often at rock bottom prices. So, in that sense, I disagree with you.

      • All 3 of the games you mentioned are published by capcom, I’m referring specifically to activision and EA. Ubisoft seems to be doing things right, they’re still producing their staple games like assasin’s creed while also producing new ip.

        The indie scene is all well and good, and I love the breadth of games coming from some of these small developers, it feels like when the ps1 was around. However, the games offered by these studios are just too short and have too little meat for me to really get into and enjoy, they’re more of a distraction.

      • EA had a good spurt of new IP in 2008 with Mirrors edge and Dead Space, but Dead Space got cash cowed with 2 remakes with little new changes, while the popular but very original Mirrors edge will appear a generation later.

        EA also tried a couple ofsmall PSN games (can’t remember their names), but one at least was poorly executed with simply poor graphics from a 2D side scroller, hardly resource intensive.

    • I think it’s sad when people don’t buy a game because of what company are Involved…. as usually there missing out on a good game they are interested in, or aren’t missing out a game they have no intention in buying I the first place OR think by them personally “boycotting” a game That this has any effect on any devs or publishers!!

  2. It’s an interesting position that Activision were put in, in that the threat of Vivendi drawing down on the pot that ActivisionBlizzard had at it’s disposal could have completely reversed the outlook of the company, particularly with the PS4 and XB1 just coming out and the extra development that would have cost.

    Realistically if this move makes Activision much more stable by removing the threat of capital draw downs by a parent company then this is good news – but that money has to be invested into titles, and not just COD, WoW or cack movie tie-ins

  3. Kotick and Kelly stumping up just over 4% of ASAC’s bid is pretty interesting… I wonder why that’s presumed to ‘bolster’ the other 96%? Other than personally tying them into the deal…

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