BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific
BBCi NEWS   SPORT   WEATHER   WORLD SERVICE   A-Z INDEX     

BBC News World Edition
 You are in: Business  
News Front Page
Africa
Americas
Asia-Pacific
Europe
Middle East
South Asia
UK
Business
E-Commerce
Economy
Market Data
Entertainment
Science/Nature
Technology
Health
-------------
Talking Point
-------------
Country Profiles
In Depth
-------------
Programmes
-------------
BBC Sport
BBC Weather
SERVICES
-------------
EDITIONS
Sunday, 9 June, 2002, 08:46 GMT 09:46 UK
Murdoch buys Vivendi's Telepiu
Il Gruppo Tele+
Telepiu will be merged with Murdoch's Stream
In a deal aimed at expanding his European media empire, Rupert Murdoch, via his consortium of investors, has agreed to pay 1bn euros (647m; $945) for Telepiu, the Italian pay-TV arm of Franco-American media group Vivendi Universal.


In a few months, the transaction closing will bring an end to the mutual claims between our two companies

Jean Marie Messier

Vivendi Universal
In addition, Mr Murdoch will pay 500m to reimburse Telepiu for future Italian Serie A football rights and for the sale of two terrestrial licences.

Telepiu is set to be merged with News Corp's own Italian pay-TV venture, Stream.

The formation will become Italy's only pay-TV operator with about 2.3m subscribers.

Peace at last

Vivendi agreed to the deal with Mr Murdoch's News Corporation because it needs the cash to deal with a massive debt mountain.

The deal should slice 1.2bn euros off the company's debts, Vivendi said.

The deal should also bring to an end months of hostilities between the two rival groups.

As part of the agreement, both said they would put ongoing litigation on ice.

"In a few months, the transaction closing will bring an end to the mutual claims between our two companies, thereby attesting to our shared concern for establishing a relationship of honest competition between News Corp and Vivendi Universal," Vivendi's chief executive Jean-Marie Messier said.

Vivendi's difficulties have almost cost Mr Messier his job as chief executive. On Saturday, he was replaced as chairman by vice-chairman Eric Licoys.

Reversed roles

The merger of the loss making pay-TV operations had been on the cards for a long time.

But two previous attempts at a deal - including one where Telepiu would have taken over Stream - have ended in failure.

The deal is subject to approval from News Corp's partner, Telecom Italia, and to regulatory approval.

Regulators have previously expressed reservations about a merger.

Expansion

The deal marks the end of Mr Messier's expansion push for Vivendi Universal.

While for Mr Murdoch, it marks the start of a long yearned for push into Italy.

Previous talks during recent years with Italy's own media baron, Prime Minister Silvio Berlusconi, have yielded few results.

News Corp is expected to own 50% of the Italian pay-TV operation while the rest would be owned by other investors, possibly including Telecom Italia.

 WATCH/LISTEN
 ON THIS STORY
David Elstein, media consultant
"It may well be that the European competition authorities will get involved."
See also:

31 May 02 | Business
17 May 02 | Business
15 May 02 | Business
08 May 02 | UK Politics
22 Mar 02 | Entertainment
24 Feb 02 | Business
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories

© BBC ^^ Back to top

News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East |
South Asia | UK | Business | Entertainment | Science/Nature |
Technology | Health | Talking Point | Country Profiles | In Depth |
Programmes