VIVENDI-SEAGRAM CLEARED
FOR TAKE-OFF
The Vivendi-Seagram marriage has been, if not totally consummated, at least given the seal of approval by Mario Monti and his feisty band of European Union regulators.
The EU gave their blessings to the $30 billion media deal between the two companies, which brings together Vivendi's European cable TV, satellite and Internet distribution systems and Seagram's music and film interests after Vivendi agreed to sell 20% of its 23% stake (with the rest set aside for a convertible-bond issue) in pay-TV company British Sky Broadcasting Group. Rupert Murdoch's News Corp. has a 37.5% stake in the satellite TV concern, with Vivendi the second-largest shareholder.
The commission said: "Vivendi offered substantial undertakings to address the competition problems, notably to divest its stake in BSkyB and to give rival pay-TV operators access to Universal's films" The EC had been concerned the deal would have strengthened Vivendi/Canal Plus ' dominant position in pay TV in Europe.
Vivendi gave a commitment to share TV rights to Universal movies in France, Belgium, Italy, the Netherlands, Spain, Denmark, Sweden and Finland for five years. They also agreed to give rivals to its Vizzavi Net portal access to Universal online music content.
The commission said it "believes these undertakings reduce significantly the ability of Canal Plus to influence other major U.S. studios and eliminate the serious doubts as to the strenghtening of a dominant position of Canal Plus following its vertical integration with Universal. Now, when do we get our 'Nutty Professor' DVDs?"
The deal has already been cleared in the U.S. by the Federal Trade Commission and in France by regulators. It has passed one of the three regulatory bodies it needs to pass in Canada.
Vivendi, Canal Plus and Seagram shareholders now must sign off on the deal. Seagram is now expected to sell off its liquor business.
Today was the deadline for the European Commision to either clear the merger or launch a more in-depth probe. Last week, Warner Music Group and EMI Recorded Music withdrew their merger plans after the commission refused to approve it. The EC ratified the AOL-TW pairing earlier this week.
