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Friday, 13 October, 2000, 21:14 GMT 22:14 UK
EU clears Vivendi-Seagram merger
Vivendi chairman Jean-Marie Messier (centre) comments on the EU decision flanked by Seagram chairman Edgar Bronfman (left) and Canal+ chairman Pierre Lescure
Chairman Jean-Marie Messier said Vivendi would sell its BSkyB stake
The European Commission on Friday approved with conditions the proposed $34bn three-way merger of media companies Vivendi and Canal+ of France and Seagram of Canada.

The deal will create the world's second biggest media group after American Online-Time Warner - to be named Vivendi Universal - with assets including Hollywood film studio Universal and music, television and telecoms companies.

It was cleared by the EC after a six-week review, which culminated in the companies offering a number of concessions to address competition concerns.

They included the sale by Vivendi of its 20% stake in UK satellite broadcaster BSkyB and an agreement to allow competitors access to the merged group's film production rights and internet portal.

Dominant position

"The Commission had been concerned that the deal would have strengthened Vivendi/Canal Plus' dominant position in pay television in France, Spain, Italy, Belgium and the Netherlands and created a dominant position in the same market in the Nordic region," the EC said in a statement.

"The pooling of Seagram's Universal music arm and Vivendi's multi-access internet portal Vizzavi also raised concerns," it added.

Vivendi, which is BSkyB's second largest shareholder after Rupert Murdoch's News Corp, said it would sell its stake in the pay-TV firm within two years.

Vivendi chairman Jean-Marie Messier said the divestment would be carried out "in the most harmonious conditions possible" and could involve one or more deals, on or off the stock market.

No "first window" rights

In another key concession, Vivendi agreed that Canal+, which it already part owns, would not get for five years so-called "first window" rights for Universal films, which would allow it to show films on pay-TV after they had been shown in cinemas but before they were more widely available.

This concession applied to Universal films in France, Belgium, Italy, the Netherlands, Spain, Denmark, Sweden and Finland.

The merged company's rivals will also have access to Universal's online music content, the EC said.

"The Commission believes that these undertakings reduce significantly the ability of Canal Plus to influence other major US studios and eliminate the serious doubts as to the strengthening of a dominant position of Canal Plus following its vertical integration with Universal," it said.

"This [EU] decision means that we can get this merger under way well before the end of the year," Mr Messier said.

The deal had already secured approval in the US from the Federal Trade Commission and in France.

But it could yet face further scrutiny, from Canadian regulators.

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20 Jun 00 | Business
Vivendi buys Seagram
20 Jun 00 | Business
France goes to Hollywood
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