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43
ACTIVISION BLIZZARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Description of Business
Activision Blizzard, Inc. (“Activision Blizzard”) is a leading global developer and publisher of interactive entertainment. The terms
“Activision Blizzard,” the “Company,” “we,” “us,” and “our” are used to refer collectively to Activision Blizzard, Inc. and its
subsidiaries. We currently offer games for video game consoles, personal computers (“PC”), and handheld, mobile and tablet devices.
We maintain significant operations in the United States (“U.S.”), Canada, the United Kingdom (“U.K.”), France, Germany, Ireland,
Italy, Sweden, Spain, the Netherlands, Australia, South Korea and China.
The King Acquisition
On November 2, 2015, we and King Digital Entertainment plc, a leading interactive entertainment company for the mobile world
incorporated under the laws of Ireland (“King”), entered into a Transaction Agreement (the “Transaction Agreement”) under the terms
of which we would acquire King (the “King Acquisition”) and King would become a wholly-owned subsidiary of the Company. On
February 23, 2016 we completed the King Acquisition as further described in Note 24 below.
As the closing of the King Acquisition occurred subsequent to December 31, 2015, our financial results as of and for the year ended
December 31, 2015 do not contain the results of King.
The Business Combination and Share Repurchase
Activision Blizzard is the result of the 2008 business combination (“Business Combination”) by and among Activision, Inc., Sego
Merger Corporation, a wholly-owned subsidiary of Activision, Inc., Vivendi S.A. (“Vivendi”), VGAC LLC, a wholly-owned
subsidiary of Vivendi, and Vivendi Games, Inc. (“Vivendi Games”), a wholly-owned subsidiary of VGAC LLC. As a result of the
consummation of the Business Combination, Activision, Inc. was renamed Activision Blizzard, Inc. and Vivendi became a majority
shareholder of Activision. The common stock of Activision Blizzard is traded on The NASDAQ Stock Market under the ticker symbol
“ATVI.”
On October 11, 2013, we repurchased approximately 429 million shares of our common stock, pursuant to a stock purchase agreement
(the “Stock Purchase Agreement”) we entered into with Vivendi and ASAC II LP (“ASAC”), an exempted limited partnership
established under the laws of the Cayman Islands, acting by its general partner, ASAC II LLC. Pursuant to the terms of the Stock
Purchase Agreement, we acquired all of the capital stock of Amber Holding Subsidiary Co., a Delaware corporation and
wholly-owned subsidiary of Vivendi (“New VH”), which was the direct owner of approximately 429 million shares of our common
stock, for a cash payment of $5.83 billion, or $13.60 per share, before taking into account the benefit to the Company of certain tax
attributes of New VH assumed in the transaction (collectively, the “Purchase Transaction”). Refer to Note 11 of the Notes to
Consolidated Financial Statements for further information regarding the financing of the Purchase Transaction
Immediately following the completion of the Purchase Transaction, ASAC purchased from Vivendi 172 million shares of Activision
Blizzard’s common stock, pursuant to the Stock Purchase Agreement, for a cash payment of $2.34 billion, or $13.60 per share (the
“Private Sale”). Robert A. Kotick, our Chief Executive Officer, and Brian G. Kelly, Chairman of our Board of Directors, are affiliates
of ASAC II LLC.
On May 28, 2014, Vivendi sold approximately 41 million shares, or approximately 50% of its then-current holdings, of our common
stock in a registered public offering. Vivendi received proceeds of approximately $850 million from that sale; we did not receive any
proceeds.
As of December 31, 2015, we had approximately 734 million shares of common stock issued and outstanding. At that date, (i) Vivendi
held 41 million shares, or approximately 6% of the outstanding shares of our common stock, (ii) ASAC held 172 million shares, or
approximately 23% of the outstanding shares of our common stock, and (iii) our other stockholders held approximately 71% of the
outstanding shares of our common stock.
On January 13, 2016, Vivendi sold all of their remaining shares of our common stock. We did not receive any proceeds.
10-K Activision_Master_032416_PrinterMarksAdded.pdf 43 3/24/16 11:00 PM