Activision and Blizzard Owner Vivendi Games Merge, Create Activision Blizzard

Update: Blizzard has posted an FAQ on its official site stating that neither its games, policies, not development process will be affected by the merger.

Original story: In a surprising and wholly unexpected Sunday announcement, Blizzard Entertainment owner Vivendi Games announced that it will be merging its assets and studios with those of Activision. In all, the deal is valued at $18.9 billion.

Once the merger is complete, Activision will be known as Activision Blizzard, with publishing label Vivendi Games operating as a wholly owned subsidiary. The new company is said to have "the highest operating margins of any major third-party video game publisher," with an estimated $3.8 billion in "pro forma combined calendar 2007 revenues."

Former Vivendi Games parent company Vivendi will hold a majority stake, approximately 52%, of Activision Blizzard. Vivendi-designated representatives will also occupy a majority of the new company's board of directors. The board will consist of 11 members: six appointed by Vivendi, two from Activision, and three independent directors who currently serve on Activsion's board.

"Blizzard's industry-leading PC games business...is an exceptional fit for Activision's highly profitable console games business," said Blizzard president and CEO Mike Morhaime.

Blizzard is best known for a number of widely successful PC titles, including the subscription-based massively multiplayer online sensation World of Warcraft (PC), which has over 9.3 million subscribers. The studio is currently working on the highly anticipated PC RTS StarCraft 2, and is heavily rumored to be developing the long-awaited PC RPG Diablo 3.

"From our interactions with the Activision team, it is clear we have much in common in terms of our approaches to game development and publishing," Morhaime continued. "Above all, we are looking forward to continue creating great games for Blizzard gamers around the world, and we believe this new partnership will help us to do that even better than before."

According to the press release, Vivendi Games is currently worth $8.1 billion, and Vivendi is pouring an addition $1.7 billion of cash into the transaction. Along with Blizzard Entertainment, the company also owns the rights to the Crash Bandicoot and Spyro the Dragon franchises.

Activision holds the video games rights to a number of popular franchises, including Guitar Hero, Tony Hawk, Call of Duty, Transformers, and Shrek.