WSJ: Activision-Vivendi deal almost didn't happen

Earlier today, Microsoft announced that it had made an unsolicited bid to buy Yahoo, Inc. for a whopping $44 billion. However, as a Wall Street Journal report makes abundantly clear today, the process of mergers and acquisitions is a fragile one. The financially focused newspaper recounted a handful of scenes from the year-long negotiation that led to last year's announcement of a Vivendi-Activision merger, and discovered that the deal nearly fell apart--twice.

The companies first began the discussions that led to a union in late 2006, and after more than half a year of haggling, Vivendi CEO Jean-Bernard Levy was ready to walk away. Levy called up Activision CEO Robert Kotick in June of 2007 to tell him that because the talks had seemingly stalled with the two sides significantly far apart on terms, "he did not think it made sense to continue discussions concerning a possible transaction at that time."

The two sides resumed talks, but in September it was Activision's turn to call Vivendi's bluff. Kotick called up Vivendi Games CEO Bruce Hack and told him much the same thing Levy had said months earlier. In the end, the protracted bargaining period benefited Activision, as the company's stock steadily increased throughout 2007, and the final deal wound up valuing the shares at a 31 percent premium over their market value. If regulators approve the union later this year, the new company, called Activision Blizzard, will be valued at $18.9 billion.