Irvine’s Blizzard Entertainment Inc., the top maker of video games played on the Web, is combining with Santa Monica-based Activision Inc. in a complex $19 billion deal that’s set to form the world’s biggest video game company.
France’s Vivendi SA, Blizzard’s parent, is set to combine its video game unit with Activision. Once the deal is complete, Vivendi is expected to own 68% of the venture.
The new company, Activision Blizzard, is set to have $4 billion in yearly sales. That stands to top video game king Electronic Arts Inc., with expected sales of $3.2 billion this year.
Robert Kotick, Activision’s longtime chief executive, is set to be Activision Blizzard’s chief executive. The company’s headquarters is likely to be in Santa Monica.
Blizzard cofounder and Chief Executive Mike Morhaime is expected to continue running the online game maker.
What the deal means for Blizzard’s headquarters in the Irvine Spectrum is unsettled.
On its own, Blizzard is expected to see about $1 billion in sales this year, the company said.
Under the terms of the deal, shares of Vivendi Games are set to be converted into 295 million Activision shares.
Vivendi also is set to buy $63 million of new shares for a total of about $2 billion in cash, giving it a 52% stake in the new company, worth $9.8 billion.
After the deal closes, Activision Blizzard is set to pay $4 billion to buy back about 147 million of its own shares, potentially giving Vivendi about a 68% stake.
The deal is expected to close by the first half of next year after approval by the boards of directors of Vivendi, Vivendi Games and Activision.
The deal is expected to add to earnings after it closes.
Activision is best known for its series of games that feature pro skateboarder Tony Hawk, as well as the hit series “Guitar Hero” and other titles.
Blizzard is best known for “massively multiplayer online games,” where thousands of players face-off simultaneously over the Internet. It’s best selling title, “World of Warcraft,” has more than 9 million players.
