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Vivendi Raiding Activision's Piggy Bank

A few reports (like this one) have popped up recently talking about the inner financial workings between Activision Blizzard and corporate parent Vivendi (thanks Joao). This article attempts to pull back the curtain to explain to us regular munchkins what magic the financial wizards are performing, explaining that this will saddle the publisher with some of Vivendi's gigantic debt. Here's how this works:

Activision Blizzard is a very successful company, and has just over $4 Billion in its accounts, much of it kept in off-shore accounts. The gaming company has done well for itself by focusing on big titles and not spreading itself out to mobile and free-to-play games. They would need to go into debt in order to meet the special dividend that will be put forth by Vivendi because of US taxes that will come into play when the money changes hands. Current estimates to the amount of debt that A/B will be forced to take on sits at about $1.5 Billion.

Vivendi has accrued over $17 Billion in debt, which was the result of poor business strategies involving telecoms. The original agreement with Activision Blizzard stated that the parent company could not require special dividends from A/B, but that deal expired earlier this month. Vivendi is wasting no time taking everything it can from the game company.

Although Activision CEO Bobby Kotick seems interested in buying the company back from Vivendi, that hasn’t happened. Vivendi has already tried selling off the company, but it didn’t seem there was an interested party who had the cash to buy the world’s largest game publisher. There doesn’t seem to be any reason why the special dividend put forth by the parent company won’t go through.

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