French media giant Vivendi confirmed that it is selling most its multi-billion dollar stake in Activision Blizzard back to the video game maker and its management team.
Vivendi will sell 85% of its stake in Activision Blizzard, worth $8.2bn (£5.34bn, €6.2bn) or $13.60 per share, back to the group. The value comes in at a 10% discount to Activision's previous closing price.
After the completion of the deal, Vivendi will hold onto its remaining stake of 83 million Activision shares, which represents 12% of the video game maker's common share holding.
"Vivendi will be able to deleverage thanks to the immediate proceeds and will also benefit from further value creation as it remains a 12% shareholder," Vivendi's chief financial officer Philippe Capron said in a statement.
"This deal is definitely a win-win with a massively accretive impact for minority shareholders."
Activision on the other hand said that it would buy back 429 million shares from Vivendi for $5.83bn. The deal is expected to be over by September this year.
Vivendi's move is part of a change of company strategy to refocus its media business. France's media and telecom giant is looking for ways to pull some of the $4.3bn in cash sitting on the balance sheet.
The current deal is Vivendi's second consecutive deal in this week.
The France-based media and telecom conglomerate said that it is in exclusive talks with Abu Dhabi-based Etisalat to sell its 53% stake in phone company Maroc Telecom.
The deal came as surprise as Vivendi earlier failed to sell its 61% stake in Activision, which is its largest and most profitable media business, last year.
Analysts at UBS expect that the company will need to exercise a third of the earnings to keep its leverage levels unchanged.
"We expect the rest to be used for share buybacks or M&A to bulk up the media side of the business," analyst Polo Tang said in a note.
Vivendi, which has over 58,000 employees, earned revenues worth €29bn and adjusted net income of €2.55bn last year.