Frenchmedia group Lagardere is set to acquire a 20% stake in pay-TV group Canal PlusFrance in exchange for Lagardere's 34% stake in Canal Plus satellite platformCanalSat and a cash payment of $626m (Euros 525m) in cash.
Lagardere would become the second-biggeststakeholder in Canal Plus France, a new company which combines all the assetsof the Canal Plus Group and satellite platform TPS. The two groups recentlyannounced the merger of their rival platforms.
Thenew company will thus be owned 65% by the Canal Plus Group, 20% by Lagardere,and 9.9% and 5.1% respectively by terrestrial networks TF1 and M6. VivendiUniversal has exclusive control of the new company via the Canal Plus Group.
Theagreement is currently in draft form and hinges on approval from labourrelations and employee representative committees as well as the broadcastauthority CSA and antitrust authorities.
Themerger of once fierce rivals CanalSat and TPS will see overheads decrease whilegiving the new group a stronger bargaining position when it comes to buyingfilms and soccer rights.
Currently,the two platforms continue to operate separately with all transactions andapprovals set to be completed by late 2006.
Ina press release, Vivendi Universal said: "The new group will be a leader inFrench broadcasting, able to take on competition from large foreign mediagroups as well as cable and internet operators."