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The paper said French law limits investors outside the 15-nation EU to owning 20% of a French TV channel. This rule coincides with another French law that states no French or EU-company can hold more than 49% of a TV station in France.
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PAY TV OWNERSHIP MAY ENDANGER VIVENDI MERGER

French Nervous About Percentage Of Foreign Ownership, May Just Surrender Anyway
France's broadcasting watchdog CSA is worried about the number of non-European Union investors who will own a stake in pay TV channel Canal Plus and new media giant Vivendi Universal, according to daily Le Monde.

The CSA's probe into the proposed Vivendi-Canal Plus-Seagram merger will look, among other things, at whether Canal will maintain the current level of financial backing for French cinema and TV film production. French media and utilities group Vivendi already owns 49% of Canal.

The paper said French law limits investors outside the 15-nation EU to owning 20% of a French TV channel. This rule coincides with another French law that states no French or EU-company can hold more than 49% of a TV station in France.

"The question of the 20% [threshold] is a real issue,'' Le Monde quoted a CSA source as saying. "We put the question to Vivendi a fortnight ago and we still haven't received an exact share-out of the capital.''

The CSA needs the information to decide whether or not to approve the $29 billion merger. Le Monde said that according to Vivendi, the new group's capital would be 46.6%-owned by French investors and 53.4% by foreign shareholders.

In 1999, Vivendi's capital was owned 37.6% by EU investors outside France, 18% by French investors, 15.8% by non-EU companies, 2.8% by staff and the remaining 25.8% by the public.

British and German groups owned 15% and 9%, respectively, while U.S. investors, with nearly 10%, were the largest group of non-EU shareholders.

"The CSA is worried by the strong presence of American pension funds in Vivendi, particularly in the wake of the recent difficulties at shoe manufacturer Groupe Andre, whose management was forced to step down after pressure from [U.S.] pension funds,'' the paper said.

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