PARIS (AP) — Shares of Vivendi SA and Activision Inc. rose yesterday in the wake of their planned deal to create a rival to Electronic Arts Inc. as the world's largest video game publisher.

California-based Activision's titles include "Guitar Hero," "Call of Duty" and the "Tony Hawk" series, while the Vivendi Games unit publishes "Crash Bandicoot" and owns the online role-playing franchise "World of Warcraft."

Their combination would create the world's largest online and console game publisher, the companies said on Sunday.

Vivendi shares gained one percent to close at 31.71 euros ($46.42) in trading yesterday in Paris. Activision shares rose $3.34, or 15.1 percent, to $25.49 in midday trading in New York after rising to a new 52-week high of $26.72 earlier in the session.

Meanwhile, Electronic Arts shares fell $1.24, or 2.2 percent, to $54.95 in midday trading yesterday.

"We wish them luck," said Jeff Brown, spokesman for Electronic Arts. "We look forward to the competition and believe that EA still has the strongest portfolio of perennial game franchises."

Vivendi Games' Irvine, California-based Blizzard Entertainment is behind the top multiplayer franchise "World of Warcraft" which the company says more than 9.3 million subscribers worldwide. Blizzard's Warcraft and Diablo series are two of the top-selling video game lines of all time.

Jean-Bernard Levy, chairman and chief executive officer of Vivendi, pledged the deal "will unlock the value of Blizzard."

"This transaction has always stuck out as the way to become the number one most successful video-game publisher," Activision chief executive Bobby Kotick said yesterday in an interview.

Kotick, who will stay on as president and CEO of the new company, said the deal had been in negotiations since January.

Under the agreement, shares of Vivendi Games will be converted into 295.3 million new shares of Activision common stock at a price of $27.50 per share, for a value of $8.1 billion, the companies said in a statement.

Vivendi, based in Paris, France, also will purchase 62.9 million newly issued shares of Activision common stock at a price of $27.50 per share, or $1.7 billion.

That will give Vivendi a 52 percent stake in a new company to be called Activision Blizzard. The combined company will be worth $18.9 billion.

Activision Blizzard will continue to operate as a public company traded on the Nasdaq Stock Market under the ticker ATVI.

Activision Blizzard's board of directors will be comprised of six directors designated by Vivendi, two Activision management directors and three independent directors who currently serve on Activision's board of directors.

Vivendi Games CEO Bruce Hack will serve as vice chairman and chief corporate officer of Activision Blizzard.

The deal will provide Activision Blizzard with the most diversified and broadest portfolio of interactive entertainment assets in the industry, according to the statement.