French media and telecom giant Vivendi has agreed to sell over 85% of its stake in the US gaming company Activision Blizzard for $8.2bn.
Vivendi said that 429 million shares will be acquired by Activision Blizzard, while 172 million shares will be acquired by a consortium of investors called ASAC II LP. Vivendi currently owns 61.1% or 684 million of common shares of Activision Blizzard.
Upon completion, Vivendi would still retain a 12% stake in Activision Blizzard, while ASAC II LP would hold 24.9% of the outstanding share capital.
Vivendi will use part of the proceeds from the sale to improve its balance sheet and maintain its BBB/Baa2 rating. However, the company’s supervisory board will determine the usage of the remaining funds.
Vivendi’s management board chairman Jean-François Dubos said:"It provides the group with greater financial flexibility and creates value for our shareholders. Vivendi is progressing at its own pace in the announced restructuring, to reach new growth milestones".
Activision Blizzard chairman and Vivendi CFO Philippe Capron said the deal is definitely a win-win.
"Vivendi will be able to deleverage thanks to the immediate proceeds and will also benefit from further value creation as it remains a 12 per cent shareholder," he said.
Activision Blizzard CEO Bobby Kotick added: "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."
The transaction is expected to close by the end of September 2013.
