EC OKs Vivendi Deal

Author:
Updated:
Original:

The European Commission last Friday approved French media and utility holding Vivendi S.A.'s $34 billion takeover of Seagram Co., on the condition that it sell its stake in direct-to-home platform British Sky Broadcasting plc.

Vivendi and BSkyB officials couldn't be reached for comment.

A sale would mean an about-face for Vivendi, which has tried to increase its ties with BSkyB for more than a year. Most recently, it has indicated its desire to own a portion of Sky Global Networks Inc., the soon-to-be-spun off News Corp. unit that will hold the company's international distribution properties, including BSkyB.

Last year, BSkyB and Vivendi-owned DTH platform Canal Plus S.A. discussed possible alliances, but those talks broke down.

With first-round approval secured, Vivendi will not face a more extensive investigation of its planned purchase, an EC spokesman in New York said.

Vivendi also agreed to give Canal Plus competitors access to at least 50 percent of "first-window" rights to Universal film and TV programming, the EC said. At the same time, the company will give competing Internet services access to Universal's music library for five years.

"The commission had been concerned that the deal would have strengthened Vivendi/Canal Plus' dominant position in pay television in France, Spain, Italy, Belgium and the Netherlands," the EC said in a prepared statement.

Vivendi scheduled a press conference for Friday evening, Paris time, to discuss the EC ruling. On Thursday and Friday, Vivendi and Universal met with analysts in Paris to discuss the combined Vivendi-Universal entity.

"The company will have the perfect mix of assets, combining rich global and local content.with state-of-the-art interactive distribution channels to seize growth opportunities in all its markets," Vivendi CEO Jean-Marie Messier said in a prepared statement following the meeting.

The merged Vivendi-Universal would have media revenues of 24.6 billion euros ($21.2 billion) this year, Messier added. Over the next two years, its content division is predicted to grow by 6 percent annually, while distribution revenue will rise 15 percent to 20 percent per year, the company said.

Earlier in the week, the EC approved America Online Inc.'s purchase of Time Warner Inc., after AOL agreed to sever its ties with German media company Bertelsmann A.G.

Related