Proposed merger of Vivendi, Activision granted approval by the European Commission

By Lisa Kerner

Charlotte, N.C., April 16 - The European Commission announced its approval of the proposed acquisition of Activision, Inc. by Vivendi SA.

The Commission determined that the transaction would not significantly impede effective competition in the European Economic Area or any substantial part of it, according to a statement released on Wednesday.

Horizontal overlaps between the activities of Vivendi and Activision relating to game software publishing are limited, the commission said.

In addition, for all categories of game software, the combined company would face strong competition by Electronic Arts as well as by game console manufacturers such as Sony, Nintendo and Microsoft, the statement said.

In December, it was reported that Vivendi subsidiary Vivendi Games will combine with Activision in an $18.9 billion transaction to create Activision Blizzard, "the world's largest pure-play online and console game publisher," a news release stated.

The deal calls for Vivendi to purchase 62.9 million newly issued shares of Activision common stock for $27.50 each, or $1.7 billion, in cash for a controlling interest in the company. It was previously noted that the per-share price is a 31% premium to Activision's average closing price over the 20 trading days ended Dec. 2.

Vivendi Games will merge with a wholly owned subsidiary of Activision. Shares of Vivendi Games will be converted into 295.3 million new shares of Activision common stock for some $8.1 billion based on the transaction price of $27.50 per Activision share, according to a prior news release.

The proposed transaction, when first announced, was expected to close in the first half of 2008.

Following the transaction's close, Activision Blizzard will launch a $4 billion all-cash tender offer to purchase up to 146.5 million Activision Blizzard shares at $27.50 per share, the companies said.

Vivendi agreed to acquire from Activision Blizzard up to an additional $700 million of newly issued Activision shares at $27.50 per share.

Vivendi is a digital entertainment company based in Paris. Vivendi Games participates in the subscription-based massively multi-player online role-playing games category.

Activision develops, publishes and distributes interactive entertainment and leisure products. The company is located in Santa Monica, Calif.

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