Paris, Sept 03: Shares in Vivendi Universal jumped 3.6 per cent in opening trading here after the French media and communications group said it was in exclusive talks with General Electric (GE) to merge their US entertainment assets. Vivendi shares were showing a gain of 3.61 per cent at 17.18 Euros after the first several minutes of trading, while the CAC 40 index of leading French stocks advanced 1.05 per cent.
Vivendi said late yesterday that it had entered exclusive negotiations with GE to merge its US unit Vivendi Universal Entertainment with the US conglomerate's broadcasting arm NBC to create a massive new media company. Under the terms of the agreement, Vivendi would receive 3.8 billion dollars (3.5 billion Euros) for contributing its US unit Vivendi Universal Entertainment (VUE), which includes Universal Studios and TV, several US cable television networks and theme parks, and would see its debt cut by 1.6 billion Euros from the deal.
NBC is the oldest US television network, tracing its history back to the early days of radio, and has a long affiliation with GE.
The deal trumps a rival offer from a consortium led by Canadian Edgar Bronfman Junior, who originally sold the Universal entertainment assets to Vivendi when he headed Seagram a few years ago. Vivendi was auctioning off VUE as part of a plan to raise funds to pay down a massive debt built up under the leadership of former chief executive Jean-Marie Messier, who spent heavily on costly media assets at the height of the technology bubble. Bureau Report