Vivendi Considers Breakup After Activision Deal

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July 26 (Bloomberg) -- Vivendi SA, announcing the sale of most of its stake in video-games maker Activision Blizzard today, said its board is considering splitting the French company up to let Chairman Jean-Rene Fourtou rebuild its remaining businesses around media and content. Cory Johnson reports on today's "DrillDown" on on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)

In the first place?

This is really interesting.

Activision has always had important partners on the side of avendi.

But that's a struggling company, activision is doing well.

Avendi's going to get $5.8 billion in this payoff.

This has gone from being one of the sort of second-tier video game companies to the dominant video game company.

If you look at a 10-year stretch of this company, it's really grown, principally on the back of world of war craft, again from a big player to the dominant player in the video game business.

So, in terms of this deal, vivendi's stake goes from 61% down to 12%. they're going to take a lot of cash out of this.

Cash from two sources.

The company's going to buy back a bunch of shares and a group of -- the c.e.o. of the company and co-chairman, as well as some insiders and the chinese company are going to buy 24% of the company.

The tencent part is very interesting because of world of war craft is a dominant part of this company.

World of warcraft has driven the success of this company, along with call of duty and other games.

But this world of warcraft business has really done very well for these guys.

Really helped propel them.

And in china.

In china particularly.

So it's also interesting here to see the sort of dual classes, retiring a bunch of shares.

So the existing shareholders are going to own more of the company.

The outstanding shareholders are going to own about 60% of the company and that means earnings per share are going to go higher because of fewer shares out there.

Who's the winner here?

The c.e.o. is taking the reins of this company again.

Always had very important partners.

In the early days it was steve wynn who helped him fund this company and bobby has always been there at the helm.

I remember talking about this company back, i don't know, 15 years ago, 16, 17 years ago.

You're dating yourself.

I was 3 at the time.

Bobby was 6. put this into context for us.

We're seeing a lot of major shifts in the gaming business right now.

Obviously zynga really struggling as we saw yesterday.

E.a.'s been looking for a new c.e.o. for months.

There are two really -- well, there's three really big trends.

One is the huge growth of gaming.

Gaming in terms of revenue is bigger than movies.

I'm going to say it again.

Gaming in terms of revenue is bigger than movies.

We talk about movies like they're a big business in america.

Gaming is bigger.

But it's a certain population of society.

Principally men of a certain age.

That's one of the big trends.

Then you've got the online trend and that's a really big deal because that's a new business coming up.

We've seen that with zynga and we've seen the struggles.

You've also got this old trend of new consoles coming.

Activision is spending big money on research and development, getting ready for this new refresh in the console business.

The xbox-1, the ps-4. that's all coming out.

That has led to a lot of companies seeing a big slide in sales coming up into this transition period.

But activision has been doing very well in this.

They gave us new numbers about the quarters announced next week and those numbers are really strong.

Cory johnson, our editor at large, thank you.

Zynga has abandoned its plans

This text has been automatically generated. It may not be 100% accurate.


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