Deal will value new firm at US$9.85bn.
The European Union has given permission for French conglomerate Vivendi to proceed with its proposed acquisition of gaming giant Activision.
The deal, which will see the creation of a new company called Activision Blizzard, is worth around US$9.85bn.
Vivendi will own 52 per cent of the new company, which is expected to generate revenues of US$3.8bn for the year.
Activision Blizzard will incorporate a number of popular titles under one umbrella, including Guitar Hero, Call of Duty, Tony Hawk's skateboarding games and World of Warcraft.
The new company would rival the dominance of Electronic Arts, currently the world's biggest games publisher.