On July 25, 2013 at 11:59 PM EDT Activision Blizzard, one of the global leaders in interactive entertainment known for franchises like Call of Duty, World of Warcraft, Skylanders and Diablo, announced that they will acquire approximately 429 million shares from Vivendi for $5.83 billion. The Investor Group led by CEO Bobby Kotick and Co-Chairman Brian Kelly will also get 172 million Activision Blizzard shares for $2.34 billion. This move will help Activision regain independence because the majority of its shares will be owned by the public, Vivendi retaining only 12% of the shares.
Bobby Kotick, CEO of Activision Blizzard, said, “These transactions together represent a tremendous opportunity for Activision Blizzard and all its shareholders, including Vivendi. We should emerge even stronger—an independent company with a best-in-class franchise portfolio and the focus and flexibility to drive long-term shareholder value and expand our leadership position as one of the world’s most important entertainment companies. The transactions announced today will allow us to take advantage of attractive financing markets while still retaining more than $3 billion cash on hand to preserve financial stability.”
Mr. Kotick continued, “Our successful combination with Blizzard Entertainment five years ago brought together some of the best creative and business talent in the industry and some of the most beloved entertainment franchises in the world, including Call of Duty and World of Warcraft. Since that time, we have generated over $5.4 billion in operating cash flow and returned more than $4 billion of that to shareholders via buybacks and dividends. We are grateful for Vivendi’s partnership through this period, and we look forward to their continued support.”
A key investor in this buy-back is Tencent, the Chinese investment company that is known for its aggression towards competitors. In 2012 Tencent was holding 43 percent of all PC gaming sales in China. Back in 2012 the Korean gaming industry lead by Nexon and NCsoft was forced to join forces in order to avoid a takeover from Tencent.
At the moment Activision Blizzard is working together with Tencent in order to bring Call of Duty Online to the Chinese Market. Today Kotic said that “As far as Tencent, you know, I think their investment just confirms the enthusiasm we have in our partnership for Call of Duty in China. They do not have a board seat. They are a passive investor and I think it was largely as a result for the enthusiasm we’re doing together.”
I am very curious about Tencet future plans for the Western Market cause lately they seem to watch us like Big Brother.