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overview
holdings
landmarks
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overview
This profile covers Vivendi and Vivendi Universal.
This page covers -
There
are supplementary profiles on Seagram
(inc MCA and Universal) and Polygram.
introduction
Paris-based conglomerate Vivendi
Universal, began as a French civil engineering enterprise,
grew to absorb the Universal entertainment conglomerate
in the US and then sold or spun off most of its media
acquisitions after after investors lost patience over
rising debts.
Restructuring
since 2002 has reduced Vivendi to a significant but much
smaller French film, television and telecommunications
operator. It is likely to shed the 'Universal' part of
the corporate name in implementing the October 2003 of
a deal that transfers its US film, theme park and cable
television interests to a joint venture with NBC-owner
General Electric.
The group results from a 'big media' dance of the anacondas
- French services and telecommunications giant Vivendi
swallowed Seagram, the US-Canadian beverages giant that
had previously swallowed the Universal entertainment conglomerate
(books, theme parks, film, multimedia ...) and Polygram
music empire, before ingesting other delicacies.
At the time of the announcement the merger was valued
at around US$34 billion, with the new group having revenues
of US$55 billion. Observers criticised its tardiness in
shedding non-media assets (such as power stations, water
treatment plants, soft drink bottlers, distilleries and
wineries) and its ongoing acquisition of other media groups.
It sold its remaining stake in the Havas
advertising group (Havas dates from the 1830s and formerly
encompassed book publishing, retail, wholesale distribution
of print, a major news service and advertising) and some
services interests. The sell-off initially went to fund
further content & carriage acquisitions, rather than
pay down debt.
Vivendi for example bought MP3.com (sold to CNET
in November 2003) and US publisher Houghton Mifflin in
mid 2001 (acquired for for an aggregate US$2 billion and
unloaded to a Lee, Blackstone and Bain private
equity consortium for US$1.66bn the following year)
and much of USA Networks at the end of that year.
The sell-off also funded purchase of Vivendi's own
shares when the price slumped following the Seagram acquisition.
Messier is believed to havee spent €10 billion on
buy-backs, some of that on an undisclosed basis.
Towards the end of 2001 the group's finance director reported
in an email that
I've
got the unpleasant feeling of being in a car whose driver
is speeding up into the bends and I'm in the death seat.
Vivendi
at that time extended over four continents, with holdings
in film and tv production, broadcasting, print publishing,
retailing, theme parks, mobile phones, music and online
services.
During
the following year it fended off speculation that would
be split up, after shareholders and analysts questioned
whether they would make more money from the axe rather
than aggregation.
In October 2002, for example, it announced the sale of
its EU and Latin American publishing units to Hachette
for US$1.2
billion and was poised to sell its English-language publishing
interests. In November it sold a further 20.4% of Vivendi
Environnement (renamed Veolia Environnement in 2003) to
Eléctricité de France and other investors for €1.856
billion. In December 2002 it increased its stake in French
telco Cegetel to 70% by paying £2.5bn for BT's 26% holding,
a a precursor to sale of its film and music interests.
In February 2006 Vivendi Universal agreed to pay Matsushita
Electric Industrial Co. some US$1.15 billion to gain full
ownership of Universal Music Group (the world's largest
record company) and raise its stake in NBC Universal.
Vivendi will buy Matsushita's 7.66% stake in the holding
company that owns Universal Music Group and 20 percent
of NBC Universal.
A chronology of Vivendi Universal and some of its components
is here.
the French Connection
Founded in Paris in 1853, Compagnie Générale des Eaux
(CGE) began by supplying water to Paris, Lyons, Venice
and Constantinople. Hype about globalization
to the contrary, multinational companies have been round
for a long time.
By the late 1990s CGE was operating in over 90 countries
with a workforce of 235,000 people. Its portfolio
covered waste management, transport, energy, construction,
property development and management, and communications.
In 1983 it joined with the Havas media group, also dating
from the middle of the previous century, in establishing
the Canal+ pay television group.
CGE subsequently became Havas' major shareholder. In the
early 1990s it established a mobile phone network in France,
sold a large health care operation, built joint ventures
with partners such as Vodafone and bought rail and road
services in Germany and Scandinavia.
In 1996 it grouped its real estate-related activities
in a single subsidiary, the Compagnie Générale
d'Immobilier et de Services (CGIS), which encompassed
the Maeva vacation resorts chain, some 85 hotels, Groupe
Gymnase exercise clubs chain, Coteba engineering services,
commercial and residential investment properties and a
large portfolio of industrial holdings, including a number
of Marseilles docks.
In 1998 the group was renamed Vivendi. A year later it
gobbled up information services giant Cendant
Software and shed its property and construction arms.
Seagram and Pathé
In 2000 it announced an agreed takeover of Seagram,
the US beverages giant controlled by one wing of Canada's
Bronfman family. The deal was worth approximately US$34
billion; with combined revenues of US$55 billion.
Seagram had earlier engulfed Universal
(parks, tv & film production and distribution, cable
tv, book and music publishing) - sold by Japan's Matsushita
- and in 1998 acquired the EU Polygram
music recording empire, formerly controlled by the Philips
electronics conglomerate, the EU's unsuccessful answer
to Sony.
The new group, named Vivendi Universal, was headquartered
in Paris with a token presence in New York. C'est la
vie. It included the world’s largest music company,
second largest film library, major film production studio,
second largest theme park company, major book publishing
interests and strategic investments in groups such as
UK broadcaster BSkyB and USA Networks.
As of 31 May 2001 the Bronfmans appeared to be selling
out of group, in which they initially had a stake of around
6%. In November 2003 Edgar Bronfman - apparently bloodied
but unbowed - led a consortium that acquired Time
Warner's records and music publishing arm (now known as
Warner Music) for US$2.6
billion.
The Havas advertising arm has
gone on to acquire other advertising and public relations
in the US, UK and elsewhere; it has a separate profile.
Vivendi hoped that its Vizzavi subsidiary will be the
default portal for 80 million mobile and interactive TV
subscribers of Canal+ and Vivendi’s 50-50 joint venture
with Vodafone. There's a profile of Vivendi's wireless
ambitions in the December
2000 Wired.
Vivendi absorbed Pathé
SA in 2000 for US$2.59 billion, gaining stakes in BSkyB
and CanalSatellite and selling most of the Pathé
operations back to Seydoux for around €521 million.
In 2002 Vivendi paid US$10.3bn for the entertainment assets
of Barry Diller's USA Networks, including Liberty's
20% of USA Networks and 27% stake in Multithematiques
tv group. (USA Networks became USA Interactive, a group
embracing Expedia, Hotels.com and Ticketmaster.)
Jean-Marie Messier was educated at the Ecole Polytechnique
and the Ecole Nationale d'Administration. After serving
as an adviser to French prime minister Edouard Balladur
in the 1980s he became a partner at elite merchant bank
Lazard Frères. In 1996 he moved to Generale des
Eaux as chief executive and chairman, being acclaimed
by Le Figaro as "an almost perfect young
man".
Vivendi to Veolia
Vivendi's engineering and services arm - Vivendi Environnement
- was effectively spun off in 2002 and renamed Veolia
Environnement in 2003. As noted above, the arm dates from
1853 when CGE was founded in Paris to supply water to
that city.
As of 2002 Veolia had revenues of €30.079 billion
(57% from outside France), net income of €339 million,
operated in 84 countries (including Australia) and had
302,000 employees worldwide. Vivendi had paid US$6 billion
for US Filter in 1999. Most of that acquisition was unloaded
- at a loss of around US$4 billion - after Veolia was
spun off, with major components being acquired by Siemens.
In mid 2002 Vivendi paid US$55 million for 16% of cinema
group UGC (L'Union Générale Cinématographique),
taking its stake to 55%.
UGC had around 850 cinema screens in six EU countries
and 50% of UFD, a joint venture with Fox that is France's
leading distributor. UGC was formed as a public sector
company after the liberation of France in 1944, following
a sequestration order for collaboration with the Germans.
It initially concentrated on distribution and production
(in association with Compagnie Française de Distribution),
along with exhibition operations in Paris and the provinces.
In 1970 it was recognised as a distribution Groupement
d'Intérêt Économique - to balance
the Pathé and Gaumont interests - and privatised
in 1971 with investment from ten independent exhibitors
led by the Edeline family. UGC at that time had around
500 screens, predominantly in France and Belgium. It came
under the control of the Verrechia family as a public
company in the 1980s. Expansion during that decade and
the 1990s (notably through construction of multiplexes
in France, Belgium, the UK and Germany) saw finance group
Paribas and CGE gain major stakes.
UGC acquired the Virgin Cinemas chain in the UK from Branson's
Virgin Group in 1996 and sold ownership of its film catalogue
to Canal+, with its cinema advertising arm being acquired
by Carlton in 2002.
NBC Universal and Editis
In October 2003 Vivendi Universal and GE formed NBC
Universal: 80% owned by GE, 20% by Vivendi. The expectation
is that Vivendi will ultimately dispose of its interest.
The joint venture encompasses Vivendi's US film interests
(eg Universal Studios production and distribution units),
five theme parks, and cable television channels such as
the USA Network and Sci-Fi Channel.
Vivendi disposed of most book publishing interests to
Lagardere's Hachette, with
anti-trust action by the European Commission forcing Lagardere
to on-sell around 60% of the interests (badged as Editis)
to Wendel Investissement.
In December 2007 Vivendi announced plans to acquire a
52% stake in video game publisher Activision, which would
then be merged with Vivendi Games as Activision Blizzard,
a new entity traded on Nasdaq and valued at around US$18.9
billion. Vivendi would increase its stake to 68%. Vivendi
Games centred on its Blizzard Entertainment unit, noted
for online games such as World of Warcraft with
over nine million players worldwide. Activision's sales
in 2007 were US$1.5 billion. Vivendi Games' revenue was
US$2.3 billion.
holdings
The following page
provides an indication of Vivendi Universal's media holdings
as at December 2002, ie prior to finalisation of negotiations
about establishment of NBC Universal.
Studies
Until 2003 - with the publication of The Man Who Tried
To Buy The World: Jean-Marie Messier & Vivendi Universal
(London: Viking 2003) by Jo Johnson & Martine Orange
- there were no English-language studies of Vivendi and
little on CGE.
We have highlighted the range of material on the Bronfmans,
Seagram and parts of the empire (eg Universal studio,
Polygram and MCA) in the separate Universal
and Polygram profiles.
For Havas see Richard Barbrook's Media Freedom: The
Contradictions of Communications in the Age of Modernity
(London: Pluto Press 1995), Raymond Kuhn's concise The
Media in France (London: Routledge 1995) and the five
volume Histoire Générale de la Presse Française
(Paris: Presses Universitaires de France 1969-1976) by
Claude Bellanger, Jacques Godechot, Pierre Guiral &
Fernand Terrou.
Irene Collins' insightful The Government & the Newspaper
Press in France, 1814-1881 (Oxford: Oxford Uni Press
1959) has a more antiquarian interest.
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page (Vivendi holdings)
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