The European Commission has approved the acquisition of Activision Inc. by Vivendi S.A. under the EU Merger Regulation, stating that the competition in the European Economic Area (“EEA”) will not be significantly impeded by this transaction.

The second and third largest game publishers decided at the end of 2007 to join forces in an $18.9 billion deal. However, the deal had to be approved by the European regulators.

A Commission examined the proposed transaction and concluded that the combined firm “would continue to face several strong, effective competitors such as Electronic Arts, and game console manufacturers, such as Sony, Nintendo and Microsoft.”

At the same time, the Commission took into consideration “the vertical relationship between Vivendi, through its subsidiary Universal Music Group (UMG), in the upstream market for the licensing of music rights and Activision’s activities in the downstream market for game publishing.”

The conclusion was that the competition will not be affected in any way, “as competing game publishers would continue to have access to a sufficiently large portfolio of music rights from alternative suppliers.”

Under the terms of the deal, Vivendi gets 52 percent of the stakes. The company unveiled in December that it will contribute with its entire Vivendi Games division and $1.7 billion extra for a controlling stake.

The collaboration between the two will be interesting for Activision’s Guitar Hero, which will now have full access to Universal Music Group’s library.

“This alliance is a major strategic step for Vivendi and is another illustration of our drive to extend our presence in the entertainment sector,” said Vivendi CEO Jean-Bernard Levy, as quoted by GameSpot. “By combining Vivendi’s games business with Activision, we are creating a worldwide leader in a high-growth industry.”

Activision develops, publishes and produces game software for PCs, video consoled and handheld consoles, while Vivendi is a media and communications group, owner of Blizzard Entertainment. The new company will be called Activision Blizzard.