Activision Blizzard separation from Vivendi blocked by court order

By Adam Rosenberg September 19, 2013

Image used with permission by copyright holder

Activision Blizzard’s separation from parent company Vivendi is now in danger after the Delaware Chancery Court called for a time out on the process, the company confirms. The move is connected to the ongoing Hayes v. Activision Blizzard Inc. lawsuit, which was filed several months after the buyout plans were announced in July 2013. This doesn’t mean that the buyout won’t happen, but either the injunction will need to be modified on appeal or the deal will need to be approved in a vote of non-Vivendi shareholders before it can be pushed through.

Shareholder Douglas Hayes moved to halt Activision Blizzard’s proposed stock buyout in mid-September 2013 with a lawsuit claiming that the company failed to seek approval for the deal from shareholders. The suit also targets Activision CEO Bobby Kotick and co-chairman Brian Kelly, both of whom are part of an investment group participating in the buyout. Under the terms of the July deal, Activision Blizzard was to buy back 429 million shares of stock from its former parent for $5.83 billion while the Kotick/Kelly group (which also includes Chinese investment firm Tencent Holdings) would buy another 172 million shares for $2.34 billion. Hayes’ lawsuit alleges that Kotick and Kelly, both of whom stand to maintain their leadership roles at the independent publisher, would have been “unjustly enriched through the private sale.”

In layman’s terms, Hayes is getting exactly what he wanted. The lawsuit sought an injunction so that non-Vivendi shareholders would have an opportunity to vote on the proposed buyout, and that is what’s happening. Activision Blizzard, for its part, confirms that it “remains committed to the transaction” and is right now “exploring the steps it will take to complete the transaction as expeditiously as possible.”

For more on the terms of the deal as it was originally announced and hefty offering of analysis, take a look at our original report on the news.

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Former Digital Trends Contributor

Previously, Adam worked in the games press as a freelance writer and critic for a range of outlets, including Digital Trends…

Gaming

Microsoft finally closes its $69B Activision Blizzard acquisition

Xbox acquired Activision Blizzard on January 18, 2022, and gained the rights to Call of Duty, Candy Crush, and more.

It's done: Microsoft completed its acquisition of Activision Blizzard. The $69 billion deal means that some of gaming's biggest franchises, including Call of Duty, are now Xbox properties.

First announced in January 2022, the blockbuster deal has faced tons of scrutiny from regulators like the CMA and FTC, with there being worry that it'd be unfair to competition in various parts of the game industry. Ultimately, Microsoft proved that wasn't the case, defeating the FTC in court and finally getting the CMA to retract its objection to the deal earlier today. When the CMA did that, an Activision Blizzard spokesperson told Digital Trends "The CMA’s official approval is great news for our future with Microsoft, and we look forward to becoming part of the Xbox Team.”

Gaming

Microsoft’s Activision Blizzard acquisition is about to clear its final hurdle

microsoft activision blizzard acquisition uk preliminary approval mwiii reveal full 006

Microsoft has had a tough time getting its acquisition of Call of Duty-maker Activision Blizzard approved, but it just cleared a major hurdle. The U.K.'s CMA, which previously blocked the acquisition over concerns about its impact on the cloud gaming market, says that it has "provisionally concluded" that Microsoft has addressed its biggest issues with the acquisition.

Namely, it likes that Microsoft will give the cloud gaming rights for Activision Blizzard games to Ubisoft. "The prior sale of the cloud gaming rights will establish Ubisoft as a key supplier of content to cloud gaming services, replicating the role that Activision would have played in the market as an independent player," the CMA explained in a press release. "In contrast to the original deal, Microsoft will no longer control cloud gaming rights for Activision’s content, so would not be in a position to limit access to Activision’s key content to its own cloud gaming service or to withhold those games from rivals."
Its press release also reveals that Ubisoft will have the ability to make "Microsoft to port Activision games to operating systems other than Windows and support game emulators when requested." Essentially, it's pleased that Microsoft no longer has an iron grip on Activision Blizzard games outside of the Xbox ecosystem and is closer to supporting the deal because of it. Of course, both Microsoft and Activision Blizzard are pretty happy about this.
"We are encouraged by this positive development in the CMA’s review process," Microsoft president Brad Smith tweeted. "We presented solutions that we believe fully address the CMA’s remaining concerns related to cloud game streaming, and we will continue to work toward earning approval to close prior to the October 18 deadline."
Meanwhile, an Activision Blizzard spokesperson provided Digital Trends with the following statement: "The CMA’s preliminary approval is great news for our future with Microsoft. We’re pleased the CMA has responded positively to the solutions Microsoft has proposed, and we look forward to working with Microsoft toward completing the regulatory review process."
A final decision from the CMA is expected to be made by October 6. As Smith mentioned, Microsoft's Activision Blizzard acquisition is expected to close by October 18.

Gaming

Microsoft gives Activision Blizzard cloud gaming rights to Ubisoft

Microsoft's Xbox Cloud Gaming Service Enters Beta This Week

Microsoft announced its intention to grant Ubisoft, the publisher behind series like Assassin's Creed and Far Cry, the cloud streaming rights for Activision Blizzard titles if Microsoft's acquisition of the Call of Duty publisher goes through.
This deal was made in order to appease the U.K.'s Competition and Markets Authority (CMA). Microsoft has not had an easy time trying to acquire Activision Blizzard as it has run into heavy resistance from regulatory bodies like the U.S. Federal Trade Commission (FTC) and the U.K.'s CMA. The CMA's complaints centered around the potential monopoly Microsoft could have on cloud gaming if the deal were to go through. There was speculation that Microsoft would divest its U.K. cloud gaming efforts to appease the CMA, but it has now presented this new plan that would technically make it give up control of Activision Blizzard game-streaming rights worldwide for the next 15 years.
In a blog post, Microsoft President Brad Smith explainsed that if the Activision Blizzard acquisition happens, Microsoft will give "cloud streaming rights for all current and new Activision Blizzard PC and console games released over the next 15 years" in perpetuity following a one-off payment.
Essentially, Ubisoft will be the one deciding which cloud gaming platforms and services to put Activision Blizzard games on, not Microsoft. Smith claims that this means "Microsoft will not be in a position either to release Activision Blizzard games exclusively on its own cloud streaming service -- Xbox Cloud Gaming -- or to exclusively control the licensing terms of Activision Blizzard games for rival services," and that Ubisoft will allow them to honor existing agreements with companies like Nvidia.

Ubisoft has been cloud gaming friendly over the past several years, eagerly putting its games on services like Google Stadia and Amazon Luna. With this deal, Ubisoft says it plans to bring Activision Blizzard games to its Ubisoft+ subscription service. Activision Blizzard CEO Bobby Kotick also commented on the deal, saying that he approves of the deal, but that "nothing substantially changes with the addition of this divestiture" for Activision Blizzard and its investors.
The current deadline for Microsoft's Activision Blizzard acquisition is October 18.