VIVENDI AND ACTIVISION TO CREATE ACTIVISION BLIZZARD–WORLD’S LARGEST, MOST PROFITABLE PURE-PLA

Activision, Inc. (NASDAQ: ATVI) and Vivendi
(Euronext Paris: VIV) today announced that they have signed a definitive agreement to combine Vivendi Games,
Vivendi's interactive entertainment business -- which includes Blizzard Entertainment’s World of Warcraft®,
the world’s #1 multi-player online role-playing game franchise -- with Activision, creating the world’s largest
pure-play online and console game publisher. The new company, Activision Blizzard, is expected to have
approximately $3.8 billion in pro forma combined calendar 2007 revenues and the highest operating margins of
any major third-party video game publisher. On closing of the transaction, Activision will be renamed Activision
Blizzard and will continue to operate as a public company traded on NASDAQ under the ticker ATVI.
Activision, one of the world’s leading independent publishers of interactive entertainment, is best known for its
top- selling franchises, including Guitar Hero®, Call of Duty® and the Tony Hawk series, as well as Spider-
Man™, X-Men™, Shrek®, James Bond™ and TRANSFORMERS™. Blizzard Entertainment, a division of Vivendi
Games, has projected calendar 2007 revenues of $1.1 billion, operating margins of over 40% and
approximately $520 million of operating profit. Blizzard owns the #1 multi-player online role-playing game
franchise, World of Warcraft, which currently has over 9.3 million subscribers worldwide. Blizzard’s World of
Warcraft, Warcraft®, StarCraft® and Diablo® games account for four of the top-five best-selling PC game
titles of all time. Vivendi Games also owns popular franchises, including Crash Bandicootâ„¢ and Spyroâ„¢. Pro
forma for calendar 2007, Activision Blizzard expects to generate approximately 70% of its revenues from
owned franchises. As a result of the business combination, Activision Blizzard expects to have the most
diversified and broadest portfolio of interactive entertainment assets in its industry, positioning the combined
company to capitalize on the continued worldwide growth in interactive entertainment.
Jean-Bernard Lévy, Chairman of the Management Board and Chief Executive Officer of Vivendi stated: “This
alliance is a major strategic step for Vivendi and is another illustration of our drive to extend our presence in the entertainment sector. By combining Vivendi’s games business with Activision, we are creating a worldwide
leader in a high-growth industry. We are excited about the opportunities for Activision Blizzard as a broader
entertainment software platform. We believe this transaction will create significant value for Activision
Blizzard and Vivendi stockholders. In Activision, we have found a partner with a highly complementary business
and strong operating team. Bobby Kotick and Brian Kelly are industry pioneers, well known for creating
shareholder value. The combined strength of the existing management teams at both companies will set the
stage for further profitable growth of Activision Blizzard. We look forward to being an active and supportive
majority stockholder in a company that is poised to lead the worldwide interactive entertainment industry in
the years ahead.”
René Penisson, Member of the Management Board of Vivendi and current Chairman of Vivendi Games, added:
“We are very confident that by combining forces, Activision Blizzard will set the highest standards in quality,
reputation and profitability, and will bring together the best creative teams in the industry. The combination of
this unique product portfolio with highly professional employees gives us great confidence in the growth
prospects for Activision Blizzard.”
Said Robert Kotick, Activision's Chairman and Chief Executive Officer: “This is an outstanding transaction for
Activision and our stockholders, as well as a pivotal event in the continuing transformation of the interactive
entertainment industry. By combining leaders in mass-market entertainment and subscription-based online
games, Activision Blizzard will be the only publisher with leading market positions across all categories of the
rapidly growing interactive entertainment software industry and reach the broadest possible audiences. By
joining forces with Vivendi Games, we will become the immediate leader in the highly profitable online games
business and gain a large footprint in the rapidly growing Asian markets, including China and Korea, while
maintaining our leading operating performance across North America and Europe. Activision stockholders will
benefit from significantly increased earnings power and the recurring nature and predictability of subscriptionbased
revenues, while also having the opportunity, if they choose, to receive $27.50 per share for a portion of
their shares in the post-closing tender offer.”
Kotick continued: “Vivendi Games provides Activision with unique strategic and financial benefits and will
allow us to leverage our franchises into emerging online opportunities as Blizzard has done so successfully.
Activision has been very focused on margin expansion, and this transaction will meaningfully increase our
overall operating margins as we expand our franchises online and in new geographies. Diversifying our
revenue base among subscription-based online, console and PC formats, as well as wireless and casual
emerging opportunities, gives us the broadest platform to capitalize on industry growth. With Blizzard’s
successful franchises, such as World of Warcraft, StarCraft and an exciting pipeline of yet-to-be announced
titles, Vivendi Games’ and Blizzard’s management team will join with Activision’s strong and experienced
leaders to become an even more powerful force for innovation in online and offline interactive entertainment
across a wide range of platforms. This transaction also provides a unique relationship with Universal Music
Group – the world’s largest music company – which will benefit Guitar Hero and further extend our sizable
leadership position in music-based games.”
Mike Morhaime, President and Chief Executive Officer of Blizzard, added: "Blizzard's industry-leading PC games
business, with a track record of nine consecutive bestsellers and a global subscriber base of more than 9.3
million World of Warcraft players, is an exceptional fit for Activision's highly profitable console games
business. 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. 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.”

Structure & Terms of Transaction
Under the terms of the agreement, Vivendi Games will be merged with a wholly owned subsidiary of
Activision. In the merger, shares of Vivendi Games will be converted into 295.3 million new shares of
Activision common stock. Based on the transaction price of $27.50 per share of Activision common stock, this
implies a value of approximately $8.1 billion for Vivendi Games. Concurrently with the merger, Vivendi will
purchase 62.9 million newly issued shares of Activision common stock at a price of $27.50 per share – a
premium of 31% to Activision’s average closing price over the past 20 trading days – for a total of $1.7 billion
in cash. As a result of these transactions, Vivendi will own an approximate 52% ownership stake in Activision
Blizzard on a fully diluted basis.
Within five business days after closing the transaction, Activision Blizzard will launch a $4 billion all-cash
tender offer to purchase up to 146.5 million Activision Blizzard common shares at $27.50 per share. The tender
offer will be funded by Activision Blizzard’s cash on hand at closing, including the $1.7 billion in cash received
from the Vivendi share purchase. In addition, Vivendi has agreed to acquire from Activision Blizzard additional
newly issued shares for up to an additional $700 million of Activision common stock at $27.50 per share, the
proceeds of which would also be used to fund the tender offer. Any remaining funds required to complete the
tender offer will be borrowed by Activision Blizzard from Vivendi or third-party lenders. If the tender offer is
fully subscribed, Vivendi will own an approximate 68% ownership stake in Activision Blizzard on a fully diluted
basis.
The transaction is expected to be immediately accretive in its first year post-closing for Activision’s
stockholders and slightly accretive for Vivendi’s stockholders. Activision Blizzard is targeting pro forma
operating income of $1.1 billion and pro forma earnings per share (EPS) in excess of $1.20 in calendar year
2009. The transaction is expected to be at least $0.20 accretive to Activision stockholders in calendar year
2009.
Governance
Activision Blizzard’s board of directors will be comprised of eleven members: six directors designated by
Vivendi, two Activision management directors and three independent directors who currently serve on
Activision’s board of directors. René Penisson, currently a member of the Management Board of Vivendi and
Chairman of Vivendi Games, will serve as Chairman of Activision Blizzard. Brian Kelly, currently Co-Chairman of
Activision, will serve as Co-Chairman of Activision Blizzard. The three independent directors will be Richard
Sarnoff, Robert J. Corti and Robert Morgado. Other Activision Blizzard directors will be Robert Kotick (President
and Chief Executive Officer of Activision Blizzard), Bruce Hack (Vice-Chairman and Chief Corporate Officer of
Activision Blizzard), Jean-Bernard Lévy (Chairman of the Management Board and Chief Executive Officer of
Vivendi), Doug Morris (Chairman and Chief Executive Officer of the Universal Music Group), Philippe Capron
(Member of the Management Board and Chief Financial Officer of Vivendi), and Frédéric Crépin (Senior Vice
President, Head of Legal, Vivendi).
Management
Following the completion of the transaction, Robert Kotick will be President and Chief Executive Officer of
Activision Blizzard. Bruce Hack, current Chief Executive Officer of Vivendi Games, will serve as Vice-Chairman
and Chief Corporate Officer of Activision Blizzard, accountable for leading the merger integration and the
finance, human resources and legal functions. Mike Griffith will serve as President and Chief Executive Officer
of Activision Publishing, which after closing will include the Sierra Entertainment, Sierra Online and Vivendi
Games Mobile divisions in addition to the Activision business. Mike Morhaime will continue to serve as
President and Chief Executive Officer of Blizzard Entertainment. Thomas Tippl, currently Chief Financial Officer
of Activision, will be appointed Chief Financial Officer of Activision Blizzard and Jean-François Grollemund,
currently Chief Financial Officer of Vivendi Games, will be appointed Chief Accounting Officer of Activision
Blizzard.