Universal Studios is set to change hands once again, passing from Canadian to French ownership within the next few weeks, now that Seagram is back at the negotiating table jointly with utilities and media combine Vivendi and its pay-TV subsidiary Canal Plus.

Despite all previous denials, Seagram's boss Edgar Bronfman Jr is currently discussing the finer points in a $30bn-plus stock-swap that would result in a European-owned Hollywood studio conglomerate that would trade under the name Vivendi Universal. The negotiations do not appear to involve the US cable operator Cox Communications as had previously been rumoured in March.

Canal Plus issued a statement on Wednesday morning (June 14) confirming that Vivendi, Canal Plus and Seagram "have entered into discussions which may or may not lead to a transaction between the three companies."

Vivendi has been granted the exclusive right to negotiate what amounts to the latest response to this year's mega-merger uniting AOL with both Time Warner and EMI Music. Ever since that transforming announcement at the start of the year, consolidation has been coursing though all sectors of the global entertainment and communications industries in a giant game of corporate catch-up.

Should he succeed in hammering out a deal, Bronfman, the family scion who spearheaded Seagram's transition from liquor and soft beverages into a media company, is likely to be left with a central, but perhaps more nebulously defined role, similar to Ted Turner's current function within AOL Time Warner.

Vivendi's chairman and chief executive Jean-Marie Messier would become chief of the combined company, to be dubbed Vivendi Universal, and former Warner Bros co-chairman Terry Semel was tipped by today's New York Times to be put in charge of Universal Pictures.

Seagram and Vivendi are already involved with each other though Working Title Films, whose production slate is now jointly bankrolled by Universal and Canal Plus. Indeed, Canal Plus held lengthy talks with Seagram back in 1998, when the French group was seeking to acquire PolyGram Filmed Entertainment's European distribution and filmmaking operations.

But despite their strong ties, a full merger is far from certain, especially since some thorny structural issues still need to be resolved. Key among them is how Canal Plus can be worked into the ownership equation without falling foul of French legislation and whether Vivendi, the modern name for the old Generale des Eaux, would want to become involved in the drinks business.

According to the Wall Street Journal, Vivendi's parent company is planning to float on the New York Stock Exchange at the end of this year and then use the newly listed American depository shares as currency for the deal. However, any joint bid with Canal Plus would contravene the current French law that prohibits an industrial company owning more than 49% of a TV network. One suggested scenario is that Vivendi would buy both Seagram and Canal Plus in their entireties, but then separate off the broadcasting assets.

Vivendi, which is valued at around $70bn, also holds a 21% stake in the UK satellite broadcaster BSkyB, whose principal shareholder News Corp has also been frequently cited as a potential Seagram buyer.

Seagram's media assets include Universal Pictures, Universal Music, the Universal theme parks, a half share in the UIP international distribution apparatus, as well as a 45% stake in Barry Diller's USA Networks whose own collection of companies include domestic specialist distributor USA Films.

Universal-Vivendi question marks:

Impact on StudioCanal's empire building, and relations with Pathe, Artisan Entertainment and Cox Communications'

Relations with UIP and Working Title'

Disposal of Vivendi's water business'

Impact on Platco talks and Vivendi's BSkyB stake'

Sale of Seagram drinks ops'

Inside Seagram

Leading drinks group
Universal Music
Universal Studios
Universal Video
Film library
Half share of UIP
Partial control of Working Title
Ownership (not control) of USA Studios
Partial ownership of Sundance Channel
Specialist TV channels (mostly outside US): SciFi, 13th St, Studio Universal