French broadcast regulator, the CSA, has today given its approval to the three-way merger between Canal Plus, Vivendi and Seagram. It was previously concerned that the full takeover of Canal Plus would breach the country's regulations on media ownership.
The original takeover proposal involved the creation of a new company, Canal Plus Programmes, operating the Canal Plus pay-TV channel, in which Vivendi would hold only a minority share.
"The Conseil Superieur de l'Audiovisuel (CSA), believed that the first project submitted did not conform to the anti-trust law according to which a television company cannot be owned more than 49% by a single shareholder,'' the CSA said this morning in a written statement.
"To guarantee the respect of this law, the CSA demanded that Canal Plus SA's economic and financial independence be guaranteed, which required it to keep full ownership of its subscriber list, a direct relationship with subscribers, revenues from subscriptions and control over its commercial and pricing policy. Under these conditions, the CSA has decided not to oppose the project submitted to it,'' the CSA statement said.
The greenlight is a personal triumph for Vivendi boss Jean-Marie Messier who has been actively negotiating with the CSA since last Thursday. He had to tread a careful line in order not to reduce the value of the larger Vivendi Universal takeover.
Approval by the French authorities should go some way to reassuring the investment markets which have continued to worry about the creation of Vivendi Universal and may buy it some favour in Brussels. The firms submitted the merger plans to the European Commission for competition approval last week. The Commission has until Aug 21 to conduct a preliminary one-month review after which it will either decide there is no case to answer or launch a full four-month investigation.