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Robert Boyle, PWC
"Overall it will be a French control"
 real 28k

Tuesday, 20 June, 2000, 10:57 GMT 11:57 UK
France goes to Hollywood
Vivendi owns France's largest cable operator Canal+
Vivendi owns France's largest cable operator Canal+
Vivendi was once a dull utility company, supplying water and running trams in the French provinces.

But in the space of a few years, it has been transformed under the dynamic leadership of Jean-Marie Messier into a telecoms and media giant.

Until two years ago, it was known as Compagnie Generale des Eaux, the French national water company.

Founded in 1853, the company was soon supplying water to Paris, Lyons, Venice and Constantinople.

It expanded into waste management, transport, energy, construction and property.

Media mad

But in recent years, under the leadership of chief executive Jean-Marie Messier, Vivendi has sought to refocus itself as a telecoms and media company.

It linked up with the Havas media group to create Canal Plus, France's first encrypted pay TV channel. On top of that, it owns a stake in BSkyB.

It also controls France's number two telecoms operator, Cegetel, film group Pathe and has a stake in web provider AOL France.

Recently, it signed a deal with Vodafone to create a multi-access internet portal called Vizzavi with a potential of 80 million users.

"Music and Vizzavi, a winning card in the new age of internet," Mr Messier is reported to have said.

Vivendi's rapid rise has given it a pivotal role in the recent consolidation of the European telecoms sector.

Merger mania

It was courted both by Mannesmann and Vodafone in their recent merger battle, and Vivendi's decision to agree an internet deal with Vodafone was seen as a crucial stage in the takeover.

Vivendi strongly believes that the new generation of mobile phones, which will allow full internet access, are the wave of the future.

It is pursuing an expensive bid for a third generation mobile phone licence in France, and may bid elsewhere.

It hopes that its portal, Vizzavi, will be the means by which mobile phone users across Europe will access the web.

And it was desperate to ensure that it could offer content for that portal - including music downloads.

Vivendi's strong position in cable television also means that it has an insatiable appetite for films.

Now it will attempt to combine the role of media provider and distributor - not an easy path.

Sony's purchase of Columbia Studios has not been as successful as hoped.

And there are worrying precedents for the French in Hollywood as well.

The last foray into movie production was the disastrous purchase of MGM by the state bank Credit Lyonnais - a move that contributed to its bankruptcy ten years later.

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