252
Annual Report -
2013
-
Vivendi
4
Financial Report | Statutory Auditors’ Report on the Consolidated Financial Statements |
Consolidated
Financial Statements
| Statutory Auditors’ Report on the Financial Statements | Statutory Financial Statements
Note 7. Discontinued operations
Note 7.
Discontinued operations
As from the second quarter of 2013, and in compliance with IFRS 5
taking into account the anticipated closing dates of the current sales,
Activision Blizzard and Maroc Telecom Group have been reported
in Vivendi’s Consolidated Statement of Earnings and Statement
of Cash Flows, as discontinued operations.
In practice, Activision Blizzard and Maroc Telecom Group have been
reported as follows:
their contribution, until their effective sale, to each line of Vivendi’s
Consolidated Statement of Earnings (before non-controlling
interests has been grouped under the line “Earnings from
discontinued operations”; and
their contribution, until their effective sale, to each line of Vivendi’s
Consolidated Statement of Cash Flows has been grouped under the
line “Cash flows from discontinued operations”.
In accordance with IFRS 5, these adjustments have been applied to all
periods reported in the Consolidated Financial Statements (2013 and
2012) to ensure consistency of information.
On October 11, 2013, Vivendi deconsolidated Activision Blizzard
pursuant to the sale of 88% of its interest.
Moreover, the contribution of Maroc Telecom Group to each line
of Vivendi’s Consolidated Statement of Financial Position as of
December 31, 2013 has been grouped under the lines: “Assets of
discontinued businesses” and “Liabilities associated with assets of
discontinued businesses”.
7.1.
Sale of Activision Blizzard
On October 11, 2013, Vivendi completed the sale of 88% of its interest
in Activision Blizzard, or 600.64 million shares priced at $13.60 per
share, for $8,169 million (€6,044 million) in cash.
The key terms of this sale are as follows:
through the acquisition of a Vivendi subsidiary, Activision Blizzard
repurchased 428.68 million shares at $13.60 per share for a cash
consideration of $5,830 million;
concomitantly, Vivendi sold 171.97 million Activision Blizzard shares
at $13.60 per share for a cash consideration of $2,339 million to
an investor group (ASAC II LP) led by Mr. Robert Kotick, Activision
Blizzard’s Chief Executive Officer, and Mr. Brian Kelly, the Chairman
of the Board of Directors. ASAC II LP owns approximately 24.7%
of the outstanding share capital (following the repurchase of
428.68 million shares by Activision Blizzard);
pursuant to the simultaneous closings of both sales on October 11,
2013, Vivendi retained 83 million Activision Blizzard shares,
representing 11.9% of Activision Blizzard’s outstanding share capital
(following the repurchase of 428.68 million shares by Activision
Blizzard). Vivendi’s remaining ownership is subject to a staggered
15-month lock-up period as described below. The sale proceeds from
the remaining ownership are estimated at a total of $1,129 million
(€832 million), assuming the hypothesis of $13.60 per share and
at $1,480 million (€1,078 million), assuming the hypothesis of
Activision Blizzard’s share price on December 31, 2013 of $17.83
per share; and
the agreements governing the transaction include certain continuing
commitments given by the parties.
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Deconsolidation of Activision Blizzard
as from October 11, 2013
As from October 11, 2013, as a result of the sale of 600.64 million
shares of, or a 53.46% interest in Activision Blizzard, Vivendi lost
control of and deconsolidated Activision Blizzard. In the Consolidated
Financial Statements for the year ended December 31, 2013, the
remaining 83 million Activision Blizzard shares have been recorded
as assets held for sale, subject to the staggered lock-up period. This
interest is revalued at the basis of stock market price and the current
EUR/USD exchange rate at each reporting date (or €1,078 million as
of December 31, 2013) and the unrealized gains or losses on such
investments has been recognized in “Earnings from discontinued
operations” (or €245 million as of December 31, 2013).
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Capital gain on divestiture
From an accounting perspective and in accordance with IFRS, Vivendi
is considered to have sold 100% of its interest in Activision Blizzard
following the loss of control of this subsidiary. The gain on sale was
determined as the difference between the value of 100% of Activision
Blizzard shares owned by Vivendi at a price of $13.60 per share (net
of costs to sell) (€6,851 million) and the value of Activision Blizzard’s
net assets attributable to Vivendi SA shareowners, as recorded in
Vivendi’s Consolidated Statements at the date of the loss of control
(€4,491 million). Moreover, in accordance with IFRS, foreign currency
translation adjustments attributable to Vivendi SA shareowners in
relation to Activision Blizzard were reclassified to profit or loss, i.e., a
gain of €555 million. Therefore, the total capital gain on divestiture,
which amounted to €2,915 million, with no tax impact, has been
recognized in the Consolidated Statement of Earnings under the line
“Earnings from discontinued operations”.
