The world’s largest video game publisher Activision Blizzard will no longer be owned by a parent company.
Acti is set to buy itself from French media giant Vivendi by purchasing 429 million shares for $5.83bn. At the same time, Activision Blizzard CEO Bobby Kotick and co-chairman Brian Kelly have formed ASAC II LP to purchase 172 million shares for approximately $2.34bn in cash, with $100m personally from Kotick and Kelly. Chinese investment firm and gaming portal Tencent will also be a part of ASAC II LP. Together, ASAC will own 24.9% of the company.
Kotick 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.
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.
Activision Blizzard will fund the acquisition with approximately $1.2 billion of cash and approximately $4.6 billion of debt proceeds, net of fees and upfront interest, accessed through the capital markets and bank financing.
