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Wednesday, 14 June, 2000, 10:03 GMT 11:03 UK
Vivendi and Seagram tie up
Canal +, Vivendi and Seagram logos
French media, telecoms and utility group Vivendi has confirmed that it and its television subsidiary, Canal Plus, are in talks to buy Canada's entertainment and drinks company Seagram.

Canal Plus said talks were currently ongoing with a view to "a tie-up of the three companies".

But the three companies underlined there was no guarantee they would reach a merger agreement.

The French companies gave no details of the deal and did not put a price tag on the deal, but press reports said the acquisition would be worth more than $30bn.

If the deal were to go ahead, it is likely to take the form of a share swap between the three companies.

Drinks business for sale?

Sources said Vivendi may decide to sell off Seagram's drinks arm to focus on its entertainment business and create a separate subsidiary concentrating on its media business.

Sources said the talks were preliminary, with lots more details still needing to be worked out, but they said an agreement could be reached within the next week.

The tie-up talks come amid widespread consolidation within the media and communications sector, which is transforming the landscape of both sectors.

Media, entertainment and internet giants are linking up, combining their different distribution methods.

For example, media giant Time Warner and the world's leading internet service provider America Online announced earlier this year plans for a marriage worth $350bn.

And television giant CBS and entertainment company Viacom recently completed a $80bn merger.

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