Vivendi May Use Billions from Activision To Pay Off Debt

Activision parent company Vivendi is reportedly looking to draw billions of dollars from Activision’s cash funds in order to pay its own debt. According to the Wall Street Journal, Vivendi is considering voting on pulling roughly $3 billion from Activision’s cash reserves by way of a “special dividend,” netting about $2 billion due to its 60% stake in the publisher.

Back in May, Activision reported that it has no debt and $4.6 billion in cash, meaning Vivendi’s withdrawal would take a significant chunk out of the company’s assets. Since Activision's cash isn't entirely held in the U.S., the Journal points out that "Activision Blizzard would have to raise debt of its own to fund such a dividend." Specifically, "$2.7 billion of that cash is held offshore, and would be subject to U.S. taxes if repatriated, according to company filings."

Vivendi is said to owe $17.3 billion in net debt, which it’s looking to pay off not only with the Activision withdrawal but also by selling its stake in North African phone operator Maroc Telecom for approximately $5.5 billion. According to The Wall Street Journal’s sources, these moves are all laying the groundwork for “a plan to spin off French phone operator SFR, Vivendi's biggest unit by revenue.”

Last year, Vivendi was said to be looking to sell Activision, with Activision at one point rumored to be looking to buy itself back. The sale was “still under consideration” as of September 2012, but recent rumors have pointed to Vivendi digging into Activision’s cash instead.

We’ve reached out to Activision and will update this story with any comment we receive. The publisher is expected to hold an earnings call in early August, so more information could be coming then.

Activision’s upcoming release slate includes Call of Duty: Ghosts, which hits stores on November 5th, and Skylanders Swap Force in October.

Andrew Goldfarb is IGN’s news editor. Keep up with pictures of the latest food he’s been eating by following @garfep on Twitter or garfep on IGN.

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