Vivendi received approval on Wednesday from the European Commission to merge its videogame unit with Activision Inc., in a deal worth $9.85 billion.

The deal will give the French telecom and media group, Vivendi, a 52 percent stake in Activision Blizzard with annual revenue amounting to $3.8 billion, putting it into a better position to better compete with the world's biggest independent game publisher, Electronic Arts Inc.

For all categories of game software, the combined firm would continue to face several strong, effective competitors, such as Electronic Arts, and the game console manufacturers, such as Sony, Nintendo and Microsoft, said the European Commission.

Activision is currently doing well in the game business such as Guitar Hero, Call of Duty and Tony Hawk although it hasn't been performing very well in the online role playing area which is dominated by World of Warcraft from Vivendi's Blizzard Entertainment.