EU Approves Vivendi-Seagram Deal
B R U S S E L S, Belgium, Oct. 13, 2000 -- European Union regulators cleared the $30 billion media deal between France’s Vivendi andCanada’s Seagram today after the companies agreed to addressantitrust concerns about Europe’s pay-TV market.
The deal brings together Vivendi’s European cable TV, satelliteand Internet distribution systems and Seagram’s interests inHollywood and music, Universal Studios and Universal Music Group,to create a global media conglomerate called Vivendi Universal.
Sale of TV Stake Helped ApprovalThe European Commission, the executive arm of the EU, said Vivendi had agreed to sell its 20percent stake in British pay-TV group British Sky Broadcasting helping to secure clearance. BSkyB is a unit of RupertMurdoch’s global media conglomerate News Corp., which also owns acompeting Hollywood studio, Fox.
“Vivendi offered substantial undertakings to address thecompetition problems, notably to divest its stake in BSkyB and togive rival pay-TV operators access to Universal’s films,” theCommission said.
Vivendi gave a five-year commitment to share TV rights toUniversal movies in France, Belgium, Italy, the Netherlands, Spain,Denmark, Sweden and Finland, where the Commission had concernsabout the new company’s power in film distribution.
The French company also offered to give rivals to its VizzaviInternet portal access to Universal’s online music content, theCommission said.
Following Vivendi’s commitment to sell its stake in BSkyB, theCommission said it may have to examine a proposed joint-venturelinking Universal with Paramount.
Decision Expected EarlierA decision from the EU antitrust authorities had been expectedlast July. However, it was deferred while the companies allayedconcerns that Vivendi’s pay-television unit, Canal Plus, would haveunfettered access to Universal movies.
The deal has already been cleared in the United States by theFederal Trade Commission. It has also passed one of the threeregulatory bodies it needs to pass in Canada, and French regulatorshave also given their consent.
Shareholders from Vivendi, Canal Plus pay-TV unit and Seagrammust also sign off on the deal, but those meetings have not yetbeen set.
Today was the deadline for the European Commission to eitherclear the merger or launch a more in-depth probe into impact themerger will have on fair competition in the 15-nation EuropeanUnion.
Vivendi has been moving well beyond its core businesses of watertreatment and construction in recent years, building up its mediaportfolio by buying the Havas publishing group and stakes in BSkyB,the satellite TV company, and AOL France.
It half-owns Canal Plus, which is a major European cable TVcompany that will join the new Paris-based conglomerate.
Seagram has also been moving beyond its roots as a liquorcompany under the guidance of Edgar Bronfman Jr., grandson of thecompany’s founder. Bronfman bought Universal Studio’s parent MCAfrom Matsushita Electric Industrial Co. of Japan in 1995, and thePolygram music company from Phillips Electronics in 1998.
Seagram’s liquor business, built up over three generations inthe Bronfman family, will be sold off. That business includesAbsolut vodka and Chivas Regal scotch.