The EC has cleared under the EU Merger Regulation the proposed acquisition of Activision Inc., a US publisher of game software, by Vivendi S.A. of France. The Commission concluded that the proposed transaction would not significantly impede effective competition in the European Economic Area ("EEA") or any substantial part of it.

The business activities of the undertakings concerned are:

• Vivendi (EPA:VIV) is a leader in entertainment with activities in music, TV, cinema, mobile, internet, and games. Vivendi holds 20% of NBC Universal, a world leader in media with activities in film and television production, television channel distribution and theme park operations.
• Activision (NASDAQ:ATVI)develops, publishes and distributes game software for PCs, video game consoles and handheld/portable consoles. Vivendi is a communication and media group with activities in the music, TV, cinema, telecommunications and video games sectors.

The Commission’s examination of the proposed transaction showed that the horizontal overlaps between the activities of Vivendi and Activision in relation to game software publishing are limited and that, for all categories of game software, the combined firm would continue to face several strong, effective competitors, such as Electronic Arts, and the game console manufacturers, such as Sony, Nintendo and Microsoft.

The Commission also investigated the vertical relationship between Vivendi, through its subsidiary Universal Music Group (UMG), in the upstream market for the licensing of music rights and Activision's activities in the downstream market for game publishing. Game publishers license music rights for use in their games, in particular music games. The Commission concluded that the vertical relationship would not give rise to competition concerns, as competing game publishers would continue to have access to a sufficiently large portfolio of music rights from alternative suppliers.

Finally, the Commission examined the vertical link between Vivendi and Activision in relation to wholesale distribution of PC games in the UK and concluded that the proposed transaction would not raise competition concerns as alternative distribution channels would continue to exist.

Who are Universal Music Group?

Universal Music Group (UMG) leads the music industry in global sales with an estimated worldwide market share in 2006 of 25.9%. Its global operations encompass the development, marketing, sales and distribution of recorded music through a network of subsidiaries, joint ventures and licensees in 77 countries, representing approximately 98% of the music market. UMG is the #1 company in countries which together represent more than 50% of the global music market sales, including the U.S. and the U.K. UMG’s business also includes the world’s largest music publishing company, Universal Music Publishing Group. Universal Music Group also includes Bravado, its merchandising company, and Twenty-First Artists, its full service management division.