EU presses start for Vivendi

$9.85 bil Activision takeover OK'd

BRUSSELS -- Vivendi's planned $9.85 billion takeover of video game giant Activision got the green light Wednesday from the European Commission.

The commission said that though the deal revealed horizontal overlaps between the companies' activities in-game software publishing, those overlaps remained "limited."

It said the combined firm, to be called Activision Blizzard, would continue to face "several strong, effective competitors," such as current gaming industry leader Electronic Arts and such game console manufacturers as Sony, Nintendo and Microsoft.

The EU regulator also looked at the effect of creating a gaming giant with ties to Vivendi's Universal Music Group, the world's largest music label. This vertical relationship did not cause the commission competition concerns.

"Competing game publishers would continue to have access to a sufficiently large portfolio of music rights from alternative suppliers," it argued.

In the merger proposed in December, Vivendi will convert the equity of its gaming unit Vivendi Games into Activision shares valued at $8.1 billion. Vivendi also will buy an additional $1.7 billion of stock, for a total of $9.8 billion, giving it a 52% stake in Activision Blizzard.

The planned deal values the combined company at $18.9 billion.

Activision was founded in 1979 and first started developing cartridges for the Atari games console. Last year, it had $1.5 billion in revenue from games including such hit franchises as "Doom," "Tony Hawk," "Guitar Hero," "Call of Duty" and "Quake."

Vivendi Games, headquartered in Los Angeles, last year had revenue of $1 billion from games and franchises including "World of Warcraft," "Diablo" and "Empire Earth."
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