Activision Blizzard, the publisher behind the Call of Duty, Skylanders and World of Warcraft, announced Friday that it purchased a number of shares from parent company Vivendi. The deal turns the publisher into a completely independent entity to be led by current CEO Bobby Kotick and chairman Brian Kelly.
The deal was made possibly by Activision Blizzard acquiring 429 million shares of the company from Vivendi along with certain tax attributes for $5.83 billion. An investor group led by Kotick and Kelly then turned around and spent $2.34 billion on 172 million shares to make the company independent with the majority of shares owned by the public. Vivendi will still hold a 12 percent stake in the company however with Kotick and Kelly’s investor group owning nearly 25 percent.
In short, $8 billion was spent to extricate Activision Blizzard from the Vivendi umbrella.
“These transactions together represent a tremendous opportunity for Activision Blizzard and all its shareholders, including Vivendi,” Kotick said in a released statement announcing the transaction. “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.”
There were rumors in mid-2012 of Activision potentially being sold by Vivendi but the French mass media company understandably had a hard time finding buyers for such a large publisher generates revenue of over $4 billion annually.
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