Vivendi, Mediaset cut deal to challenge Murdoch’s Sky
VIVENDI has agreed to acquire Mediaset’s pay-TV unit as part of a broader alliance to challenge Rupert Murdoch’s Sky in Europe, and boost its presence in Italy and Spain.
Under the proposed deal, Vivendi and Mediaset would acquire stakes of about 3.5% in each other, the Paris-based media giant said in an e-mail.
With the acquisition of the pay-TV business called Premium, Vivendi would increase its global subscriber base to more than 13-million, it said.
Mediaset shares rose 5.4% in Milan at the close on Friday to €3.50. Vivendi gained 0.9% in Paris.
The stake in Vivendi is valued at about €880m. Since Vivendi’s market value is more than six times higher Mediaset’s, the Italian company will make up the difference by giving Vivendi its 89% stake in Premium.
Telefonica of Spain, which owns about 11% of Premium, will also sell its holding to Vivendi as part of the accord, according to people familiar with the terms of the deal.
Mediaset CEO Pier Silvio Berlusconi might get a seat on Vivendi’s board, and in turn, Vivendi CEO Arnaud De Puyfontaine might join Mediaset’s board, said the people, who did not want to be named as the full agreement is not public.
“I can’t rule out joining Vivendi’s board in the future,” Mr Berlusconi told reporters in Cologno Monzese on Friday.
Mediaset, Italy’s biggest commercial TV broadcaster, has considered a sale or a partnership for Mediaset Premium because competition from Sky is hurting subscriber growth in Italy. Silvio Berlusconi, Mediaset’s founder and a former prime minister, is a longtime friend of Vivendi chairman Vincent Bollore.
“We will definitely continue to play a key role in the pay-TV business and this is not a first step that would lead to a sale of all Mediaset’s assets,” the younger Berlusconi said.
Vivendi is executing a plan to build a media group around its French pay-TV station Canal Plus, seeking combinations to expand in video and music and distribution in southern Europe. Bollore has led the company’s push to acquire stakes in Telecom Italia, Italy’s biggest phone carrier, as well as game makers Gameloft SE and Ubisoft Entertainment.