Leading French broadcaster TF1 and film group Pathe are in talks to merge part of their film activities, in a move that is seen as a response to rival Canal Plus' strength in the film rights arena, and its impending merger with Vivendi and Universal Studios.

The companies said in a joint statement: "TF1 and Pathe are currently discussing a merging of some of their businesses in the areas of movie management, acquisition and distribution. Neither the terms, nor the time frame of the partnership have been finalised to date."

According to French newspaper Le Monde, the two companies will form a joint venture under the Pathe brand involving sales and acquisitions, but not Pathe's production activities, which include Renn Productions. Le Monde also said that the two companies' catalogues are currently being valued. Neither TF1 or Pathe would comment further.

TF1 is involved in film sales, acquisitions and co-productions through international sales arm, TF1 International, which handles a library of about 510 titles, including the former CiBy 2000 catalogue. Pathe has a library of about 600 titles.

TF1 previously attempted to grab a 29% slice of Pathe in January 1999, by acquiring French financier Vincent Bollore's 20% stake. However the move was fought off by "white knights" Canal Plus and its main shareholder Vivendi, which stepped in to buy the stake and later sold it on - apart from a 17% chunk of the UK's BSkyB - to Pathe chairman Jerome Seydoux.

TF1, which is a major shareholder in digital platform TPS, has been locked in an on-going battle over pay-TV rights with Canal Plus (ScreenDaily, March 20). Teaming with Pathe would help it strengthen its hand against its rival and is also in keeping with its stated ambition to create a European major.

But Pathe has several links to Canal Plus, including a joint movie acquisition venture, C+P. Pathe is also the UK partner of StudioCanal's fledgling European distribution network.

TF1 recently made a move towards its aim of building a European studio by acquiring a 49% stake in leading French production house Telema, which has produced a string of hit comedies including France's Foreign-language Oscar entry Le Gout Des Autres. On the international front it has a three-picture pact with the UK's Merchant Ivory Productions, which kicked off with James Ivory's The Golden Bowl, and has backed titles such as Stephen Hopkins' Under Suspicion, Peter Greenaway's Eight And A Half Women and Rod Lurie's The Contender, among others.

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