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Activision and Vivendi Game have both announced today that they will be merging to form a new company, Activision Blizzard.

Activision is one of the largest publishers of video games, owning the Call of Duty, Guitar Hero, and Tony Hawk licenses. Vivendi Gamess games is one of the smaller, less awesome publishers but owned by Vivendi Universal, a gigantic media company. Vivendi Games owns Blizzard, developer and creator of such cash-factories as World of Warcraft, Warcraft, Starcraft, and has nothing to do with Witchcraft. Vivendi Games also currently owns the rights to not-as-good-as-they-used-to-be Crash Bandicoot and Spyro.

After looking over the press release (linked in PDF format), it appears that this isn't exactly a straight merger.

Activision isn't changing its name to Activision Blizzard.
Quoth the press release: "Under the terms of the agreement, Vivendi Games will be merged with a wholly owned subsidiary of Activision."

Activision Blizzard will be a new company, owned by Activision. They'll be spending $4 billion to buy up 145.6 million of their own shares, using $1.7 billion that Vivendi Games brings to the table from its own shares.

If I've decoded this correctly, I'd say that Activision is actually absorbing Vivendi, and mainly to obtain ownership of Blizzard. Now, instead of Blizzard games being published by Vivendi, they'll be published by "Activision Blizzard." Vivendi Games will probably disappear, though the name and property will be owned by Activision (not by Vivendi Universal, interestingly)

I suppose it's not technically a buyout, if anything I'd say the situation was that Vivendi running out of money but they had the valuable Blizzard crew, so they worked it out so Activision could acquire Blizzard by first taking over Vivendi Games. Business is confusing. Were this a Japanese business transaction, however, it would be infinitely more confusing.

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