Game Goliaths Blizzard and Activision Merge

An $18.9 billion deal will combine two companies with strong game portfolios and profits, presenting a challenge to former king of the jungle Electronic Arts.

In what could easily be described as one of the most significant mergers to hit the video game industry, major developers Blizzard and Activision announced plans for a merger on Sunday. Blizzard’s French parent company, Vivendi, will swallow up Activision in a deal that will put some of the most popular modern games, including World of Warcraft and Guitar Hero, under one roof.

All pieces of the deal, including the values of both companies and cash contributed by each toward the deal, add up to $18.9 billion. Vivendi paid $27.50 per share for Activision, 24 percent more than it was trading for on Friday, to acquire a 52 percent stake in the company. Shares of the new company’s stock will trade on the Nasdaq for $27.50 per share.

With $3.8 billion in combined revenue for 2007, the new company could represent the next biggest independent game developer, a title usually chalked up to Electronic Arts, which produced $3.7 billion in revenue this year.

Blizzard is well known for its best-selling PC game franchises, such as World of Warcraft, Starcraft, and Diablo. Activision has a stronger presence in console games, with titles like Guitar Hero, Call of Duty and Tony Hawk.