Vivendi and Activision to Create Activision Blizzard - World's
Largest, Most Profitable Pure-Play Video Game Publisher
Combination Brings Activision's Best-Selling Video Games, Including
Guitar Hero(R), Call of Duty(R), and Tony Hawk, Together With Vivendi
Games' Portfolio of Leading Franchises, Including Crash Bandicoot(TM)
and Spyro(TM), and Blizzard Entertainment's(R) StarCraft(R), Diablo(R)
and Global #1 Subscription-Based World Of Warcraft(R) Vivendi to
Contribute Vivendi Games Valued at $8.1 Billion, Plus $1.7 Billion in
Cash in Exchange for Approximately 52% Stake in Activision Blizzard at
Closing; Total Transaction Valued at $18.9 Billion Activision Blizzard
Will Commence Post-Closing Cash Tender Offer for Up to 146.5 Million
of its Shares at $27.50 per Share, Representing 31% Premium for
Activision Stockholders Based on 20-Trading Day Average Transaction
Will Unlock Value of Blizzard Entertainment's Massively Multiplayer
Online Games Business and Will Be Accretive to Stockholders of
Activision and Vivendi

SANTA MONICA, Calif. & PARIS, Dec 02, 2007 (BUSINESS WIRE) --
Activision, Inc. (NASDAQ: ATVI) and Vivendi (Euronext Paris: VIV)
today announced that they have signed a definitive agreement to
combine Vivendi Games, Vivendi's interactive entertainment business --
which includes Blizzard Entertainment's(R) World of Warcraft(R), the
world's #1 multi-player online role-playing game franchise -- with
Activision, creating the world's largest pure-play online and console
game publisher. The new company, Activision Blizzard, is expected to
have approximately $3.8 billion in pro forma combined calendar 2007
revenues and the highest operating margins of any major third-party
video game publisher. On closing of the transaction, Activision will
be renamed Activision Blizzard and will continue to operate as a
public company traded on NASDAQ under the ticker ATVI.

Activision, one of the world's leading independent publishers of
interactive entertainment, is best known for its top-selling
franchises, including Guitar Hero(R), Call of Duty(R) and the Tony
Hawk series, as well as Spider-Man(TM), X-Men(TM), Shrek(R), James
Bond(TM) and TRANSFORMERS(TM). Blizzard Entertainment, a division of
Vivendi Games, has projected calendar 2007 revenues of $1.1 billion,
operating margins of over 40% and approximately $520 million of
operating profit. Blizzard owns the #1 multi-player online
role-playing game franchise, World of Warcraft, which currently has
over 9.3 million subscribers worldwide. Blizzard's World of Warcraft,
Warcraft(R), StarCraft(R) and Diablo(R) games account for four of the
top-five best-selling PC game titles of all time. Vivendi Games also
owns popular franchises, including Crash Bandicoot(TM) and Spyro(TM).
Pro forma for calendar 2007, Activision Blizzard expects to generate
approximately 70% of its revenues from owned franchises. As a result
of the business combination, Activision Blizzard expects to have the
most diversified and broadest portfolio of interactive entertainment
assets in its industry, positioning the combined company to capitalize
on the continued worldwide growth in interactive entertainment.

Jean-Bernard Levy, Chairman of the Management Board and Chief
Executive Officer of Vivendi stated: "This alliance is a major
strategic step for Vivendi and is another illustration of our drive to
extend our presence in the entertainment sector. By combining
Vivendi's games business with Activision, we are creating a worldwide
leader in a high-growth industry. We are excited about the
opportunities for Activision Blizzard as a broader entertainment
software platform. We believe this transaction will create significant
value for Activision Blizzard and Vivendi stockholders. In Activision,
we have found a partner with a highly complementary business and
strong operating team. Bobby Kotick and Brian Kelly are industry
pioneers, well known for creating shareholder value. The combined
strength of the existing management teams at both companies will set
the stage for further profitable growth of Activision Blizzard. We
look forward to being an active and supportive majority stockholder in
a company that is poised to lead the worldwide interactive
entertainment industry in the years ahead."

Rene Penisson, Member of the Management Board of Vivendi and current
Chairman of Vivendi Games, added: "We are very confident that by
combining forces, Activision Blizzard will set the highest standards
in quality, reputation and profitability, and will bring together the
best creative teams in the industry. The combination of this unique
product portfolio with highly professional employees gives us great
confidence in the growth prospects for Activision Blizzard."

Said Robert Kotick, Activision's Chairman and Chief Executive Officer:
"This is an outstanding transaction for Activision and our
stockholders, as well as a pivotal event in the continuing
transformation of the interactive entertainment industry. By combining
leaders in mass-market entertainment and subscription-based online
games, Activision Blizzard will be the only publisher with leading
market positions across all categories of the rapidly growing
interactive entertainment software industry and reach the broadest
possible audiences. By joining forces with Vivendi Games, we will
become the immediate leader in the highly profitable online games
business and gain a large footprint in the rapidly growing Asian
markets, including China and Korea, while maintaining our leading
operating performance across North America and Europe. Activision
stockholders will benefit from significantly increased earnings power
and the recurring nature and predictability of subscription-based
revenues, while also having the opportunity, if they choose, to
receive $27.50 per share for a portion of their shares in the
post-closing tender offer."

Kotick continued: "Vivendi Games provides Activision with unique
strategic and financial benefits and will allow us to leverage our
franchises into emerging online opportunities as Blizzard has done so
successfully. Activision has been very focused on margin expansion,
and this transaction will meaningfully increase our overall operating
margins as we expand our franchises online and in new geographies.
Diversifying our revenue base among subscription-based online, console
and PC formats, as well as wireless and casual emerging opportunities,
gives us the broadest platform to capitalize on industry growth. With
Blizzard's successful franchises, such as World of Warcraft, StarCraft
and an exciting pipeline of yet-to-be announced titles, Vivendi Games'
and Blizzard's management team will join with Activision's strong and
experienced leaders to become an even more powerful force for
innovation in online and offline interactive entertainment across a
wide range of platforms. This transaction also provides a unique
relationship with Universal Music Group - the world's largest music
company - which will benefit Guitar Hero and further extend our
sizable leadership position in music-based games."

Mike Morhaime, President and Chief Executive Officer of Blizzard,
added: "Blizzard's industry-leading PC games business, with a track
record of nine consecutive bestsellers and a global subscriber base of
more than 9.3 million World of Warcraft players, is an exceptional fit
for Activision's highly profitable console games business. From our
interactions with the Activision team, it is clear we have much in
common in terms of our approaches to game development and publishing.
Above all, we are looking forward to continue creating great games for
Blizzard gamers around the world, and we believe this new partnership
will help us to do that even better than before."

Structure & Terms of Transaction

Under the terms of the agreement, Vivendi Games will be merged with a
wholly owned subsidiary of Activision. In the merger, shares of
Vivendi Games will be converted into 295.3 million new shares of
Activision common stock. Based on the transaction price of $27.50 per
share of Activision common stock, this implies a value of
approximately $8.1 billion for Vivendi Games. Concurrently with the
merger, Vivendi will purchase 62.9 million newly issued shares of
Activision common stock at a price of $27.50 per share - a premium of
31% to Activision's average closing price over the past 20 trading
days - for a total of $1.7 billion in cash. As a result of these
transactions, Vivendi will own an approximate 52% ownership stake in
Activision Blizzard on a fully diluted basis.

Within five business days after closing the transaction, Activision
Blizzard will launch a $4 billion all-cash tender offer to purchase up
to 146.5 million Activision Blizzard common shares at $27.50 per
share. The tender offer will be funded by Activision Blizzard's cash
on hand at closing, including the $1.7 billion in cash received from
the Vivendi share purchase. In addition, Vivendi has agreed to acquire
from Activision Blizzard additional newly issued shares for up to an
additional $700 million of Activision common stock at $27.50 per
share, the proceeds of which would also be used to fund the tender
offer. Any remaining funds required to complete the tender offer will
be borrowed by Activision Blizzard from Vivendi or third-party
lenders. If the tender offer is fully subscribed, Vivendi will own an
approximate 68% ownership stake in Activision Blizzard on a fully
diluted basis.

The transaction is expected to be immediately accretive in its first
year post-closing for Activision's stockholders and slightly accretive
for Vivendi's stockholders. Activision Blizzard is targeting pro forma
operating income of $1.1 billion and pro forma earnings per share
(EPS) in excess of $1.20 in calendar year 2009. The transaction is
expected to be at least $0.20 accretive to Activision stockholders in
calendar year 2009.

Governance

Activision Blizzard's board of directors will be comprised of eleven
members: six directors designated by Vivendi, two Activision
management directors and three independent directors who currently
serve on Activision's board of directors. Rene Penisson, currently a
member of the Management Board of Vivendi and Chairman of Vivendi
Games, will serve as Chairman of Activision Blizzard. Brian Kelly,
currently Co-Chairman of Activision, will serve as Co-Chairman of
Activision Blizzard. The three independent directors will be Richard
Sarnoff, Robert J. Corti and Robert Morgado. Other Activision Blizzard
directors will be Robert Kotick (President and Chief Executive Officer
of Activision Blizzard), Bruce Hack (Vice-Chairman and Chief Corporate
Officer of Activision Blizzard), Jean-Bernard Levy (Chairman of the
Management Board and Chief Executive Officer of Vivendi), Doug Morris
(Chairman and Chief Executive Officer of the Universal Music Group),
Philippe Capron (Member of the Management Board and Chief Financial
Officer of Vivendi), and Frederic Crepin (Senior Vice President, Head
of Legal, Vivendi).

Management

Following the completion of the transaction, Robert Kotick will be
President and Chief Executive Officer of Activision Blizzard. Bruce
Hack, current Chief Executive Officer of Vivendi Games, will serve as
Vice-Chairman and Chief Corporate Officer of Activision Blizzard,
accountable for leading the merger integration and the finance, human
resources and legal functions. Mike Griffith will serve as President
and Chief Executive Officer of Activision Publishing, which after
closing will include the Sierra Entertainment, Sierra Online and
Vivendi Games Mobile divisions in addition to the Activision business.
Mike Morhaime will continue to serve as President and Chief Executive
Officer of Blizzard Entertainment. Thomas Tippl, currently Chief
Financial Officer of Activision, will be appointed Chief Financial
Officer of Activision Blizzard and Jean-Francois Grollemund, currently
Chief Financial Officer of Vivendi Games, will be appointed Chief
Accounting Officer of Activision Blizzard.

Conditions to Closing

The transaction has been approved by the boards of directors of
Vivendi, Vivendi Games and Activision. The transaction is subject to
the approval of Activision's stockholders and the satisfaction of
customary closing conditions and regulatory approvals, including
expiration of applicable waiting periods and receipt of applicable
approvals under the Hart-Scott-Rodino Antitrust Improvements Act and
European Union merger control regulations. Pending regulatory and
stockholder approval, the companies expect the transaction to be
completed in the first half of calendar year 2008.

Financial and Legal Advisors

Activision's financial advisor on the transaction is Allen & Company
LLC and its legal counsel is Skadden, Arps, Slate, Meagher & Flom LLP.
Vivendi's financial advisor is Goldman, Sachs & Co. and Gibson, Dunn &
Crutcher LLP is acting as legal counsel to Vivendi.

Conference Call and Webcast Information

The management of both companies will host a joint conference call and
live webcast on Monday, December 3, 2007 at 8:30 a.m. ET, 2:30 p.m.
Paris time, 1:30 p.m. London time to discuss this announcement. The
companies welcome all members of the investment community to listen to
the call live by dialing into (888) 765-5554 in the U.S. or (913)
312-1235 outside the U.S. The live webcast of the call can be accessed
at www.vivendi.com and www.activision.com.

For those unable to listen to the live conference call, an audio
replay of the call will be available through December 17, 2007,
approximately two hours after the call's conclusion and can be
accessed by calling (888) 203-1112 in the U.S. or (719) 457-0820
outside the U.S. and entering the pass-code: 5648597. In addition, a
webcast replay also will be archived on the Investor Relations section
of each company's website.

Activision Broadcast Media Center

Broadcast quality video and web-streaming video is available in PAL
and NTSC formats on Activision's Broadcast Media Center at
http://activision.pondserver.com. Pathfire users can download video to
their Digital Media Gateway by choosing the Pathfire Enabled file. All
video is free of charge and its use is unrestricted.

About Vivendi

Vivendi is a global leader in digital entertainment with activities in
music, TV, cinema, mobile, internet, and games through its ownership
of Universal Music Group, Canal+ Group, SFR, Maroc Telecom and Vivendi
Games. In 2006, Vivendi had revenues of over EUR 20 billion and a
global headcount of 39,000. Listed on the Paris Stock market, Vivendi
is a member of the CAC 40. More information about Vivendi is available
at www.vivendi.com.

About Vivendi Games

Vivendi Games is a global developer, publisher and distributor of
multiplatform interactive entertainment. The company is the leader in
the subscription-based massively multi-player online role-playing
games (MMORPG) category and is building on its position in the PC,
console and handheld games markets. Vivendi Games has a global
presence, a history of franchise success, development teams around the
world and a catalog of its own original and licensed material. Vivendi
Games has approximately 4,000 employees and is driven by four creative
divisions: Blizzard Entertainment, Sierra Entertainment, Sierra Online
and Vivendi Games Mobile. Irvine, California-based Blizzard, creator
of the Warcraft, StarCraft and Diablo games series, is by far the
largest of the four entities with approximately 2,300 employees.

About Blizzard Entertainment, Inc.

Best known for blockbuster hits including World of Warcraft and the
Warcraft, StarCraft, and Diablo series, Blizzard Entertainment, Inc.
(www.blizzard.com), a division of Vivendi Games, is a premier
developer and publisher of entertainment software renowned for
creating some of the industry's most critically acclaimed games.
Blizzard Entertainment's track record includes ten #1-selling games
and multiple Game of the Year awards. The company's online-gaming
service, Battle.net(R), is one of the largest in the world, with
millions of active users.

About Activision, Inc.

Headquartered in Santa Monica, California, Activision, Inc. is a
leading worldwide developer, publisher and distributor of interactive
entertainment and leisure products. Founded in 1979, Activision posted
net revenues of $1.5 billion for the fiscal year ended March 31, 2007.
Activision has more than 2,000 employees worldwide.

Activision maintains operations in the United States, Canada, the
United Kingdom, France, Germany, Ireland, Italy, Scandinavia, Spain,
the Netherlands, Australia, Japan and South Korea. More information
about Activision and its products can be found on the company's World
Wide Web site, which is located at www.activision.com.

Calculation of Certain Estimates

All financial information relating to Activision, Vivendi Games and
Blizzard Entertainment included in this press release, including pro
forma estimates for calendar year 2007, and projections for future
periods, represent the companies' respective estimates and projections
and were not prepared in accordance with U.S. Generally Accepted
Accounting Principles. These estimates exclude the impact of expenses
related to equity-based compensation and related tax benefits,
potential one-time restructuring charges of up to $100 million that
may be incurred in connection with the transaction, and the potential
impact from non-cash intangible amortization resulting from purchase
price accounting. In addition, these estimates assume continued net
revenue growth as well as expense reductions and other synergies that
may or may not be realized. Estimates for future periods are subject
to significant inherent uncertainties, which increase with periods
farther into the future. Actual results may differ materially and are
subject to risks, including the risks described in the Cautionary Note
below. To the extent that the estimates for calendar year 2007 are
based on the historical performance of Activision and Vivendi Games
through September 30, 2007, not all such historical information has
been audited, the accounting policies of the companies may differ, and
the two companies have different fiscal years. The financial
information for Blizzard Entertainment contained in this press release
is presented on a stand-alone basis and does not reflect the results
of operations of other Vivendi Games divisions.

Cautionary Note Regarding Forward-looking Statements

Information in this press release that involves expectations, plans,
intentions or strategies regarding the future are forward-looking
statements that are not facts and involve a number of risks and
uncertainties. In this release they are identified by references to
dates after the date of this release and words such as "outlook,"
"will," "will be," "remains," "to be," "plans," "believes", "may",
"expects," "intends," "should," "continue," and similar expressions.
Factors that could cause actual future results to differ materially
from those expressed in the forward-looking statements set forth in
this release include, but are not limited to, the timing and
successful completion of the transactions described in this release
(including the timing and receipt of stockholder and regulatory
approvals and the satisfaction of other closing conditions), the
combined companies' success in executing planned strategies and
achieving assumed synergies and cost savings, sales of each company's
titles, shifts in consumer spending trends, the seasonal and cyclical
nature of the interactive game market, the ability of Activision
Blizzard to predict consumer preferences among competing hardware
platforms (including next-generation hardware), declines in software
pricing, product returns and price protection, product delays, retail
acceptance of the company's products, adoption rate and availability
of new hardware and related software, industry competition, rapid
changes in technology and industry standards, protection of
proprietary rights, maintenance of relationships with key personnel,
customers, vendors and third-party developers, international economic
and political conditions, integration of recent acquisitions and
identification of suitable future acquisition opportunities, and
foreign exchange rate changes. Other such factors include, without
limitation, the additional risks identified in Activision's most
recent annual report on Form 10-K and in the documents Vivendi has
filed with the Autorite des Marches Financiers (French securities
regulator) and which are also available in English on Vivendi's
website (www.vivendi.com). Investors and security holders may obtain a
free copy of documents filed by Vivendi with the Autorite des Marches
Financiers at www.amf-france.org, or directly from Vivendi.

The forward-looking statements in this release are based upon
information available to Activision and Vivendi as of the date of this
release, and neither Activision nor Vivendi assumes any obligation to
update any such forward-looking statements. Forward-looking statements
believed to be true when made may ultimately prove to be incorrect.
These statements are not guarantees of future performance and are
subject to risks, uncertainties and other factors, some of which are
beyond the companies' control and may cause actual results to differ
materially from current expectations.

Important Additional Information will be filed with the SEC

This communication is being made in respect of the proposed business
combination involving Activision, Vivendi and Vivendi Games. In
connection with the proposed transactions, Activision plans to file
with the SEC a Registration Statement on Form S-4 containing a Proxy
Statement as well as other documents regarding the proposed
transactions. The definitive Proxy Statement will be mailed to
stockholders of Activision. INVESTORS AND SECURITY HOLDERS OF
ACTIVISION ARE URGED TO READ THE REGISTRATION STATEMENT, PROXY
STATEMENT AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN
THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTIONS.

Investors and security holders will be able to obtain free copies of
the Registration Statement and the Proxy Statement (when available)
and other documents filed with the SEC by Activision through the
website maintained by the SEC at http://www.sec.gov. Free copies of
the Registration Statement and the Proxy Statement (when available)
and other documents filed with the SEC can also be obtained by
directing a request to Activision's Investor Relations.

Activision and its directors and executive officers and other persons
may be deemed to be participants in the solicitation of proxies in
respect of the proposed transaction. Information regarding
Activision's directors and executive officers is available in its
Annual Report on Form 10-K for the year ended March 31, 2007, which
was filed with the SEC on June 14, 2007, and its proxy statement for
its 2007 annual meeting of stockholders, which was filed with the SEC
on July 30, 2007. Other information regarding the participants in the
proxy solicitation and a description of their direct and indirect
interests, by security holdings or otherwise, will be contained in the
Proxy Statement and other relevant materials to be filed with the SEC
when they become available.

THIS DOCUMENT IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT AN OFFER
TO BUY OR THE SOLICITATION OF AN OFFER TO SELL ANY SECURITIES. THE
SOLICITATION AND THE OFFER TO BUY SHARES OF ACTIVISION'S COMMON STOCK
WILL ONLY BE MADE PURSUANT TO AN OFFER TO PURCHASE AND RELATED
MATERIALS THAT ACTIVISION INTENDS TO FILE WITH THE SEC. ONCE FILED,
ACTIVISION STOCKHOLDERS SHOULD READ THESE MATERIALS CAREFULLY PRIOR TO
MAKING ANY DECISIONS WITH RESPECT TO THE OFFER BECAUSE THEY CONTAIN
IMPORTANT INFORMATION, INCLUDING THE TERMS AND CONDITIONS OF THE
OFFER. ONCE FILED, ACTIVISION STOCKHOLDERS WILL BE ABLE TO OBTAIN THE
OFFER TO PURCHASE AND RELATED MATERIALS WITH RESPECT TO THE OFFER FREE
OF CHARGE AT THE SEC'S WEBSITE AT HTTP://WWW.SEC.GOV, OR FROM THE
INFORMATION AGENT NAMED IN THE TENDER OFFER MATERIALS.

SOURCE: Activision, Inc. Vivendi Investor Relations