Activision, Inc. and Vivendi 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.

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.

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 Levy, 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." to lead the worldwide interactive entertainment industry in the years ahead."

Said Robert Kotick, Activision's Chairman and Chief Executive Officer: "This is an outstanding transaction for Activision and our stockholders (update: as of Dec 3, Activision's stocks soared, jumping 16 percent), as well as a pivotal event in the continuing transformation of the interactive entertainment industry."

No kidding.