French media group Vivendi Universal (VU) today announced that it is to acquire the entertainment assets of USA Networks in a deal worth £10.3 billion. VU will have 93% control of the new company, Vivendi Universal Entertainment (VUA), which will bring together Universal Studios Group and the USA business.
Vivendi will pay USA Networks around $10.4 billion in cash and securities and will finance this by selling the 314 million shares of USA Networks which it already holds. A portion of the cash financing will be provided from the proceeds from the sale of 9% of Vivendi Environnement and also the recent sale of BSkyB shares (See
Vivendi Offloads BSkyB Shares).
Barry Diller, CEO of USA Networks, will become chairman and CEO of Vivendi Universal Entertainment and, in addition, will remain chairman and CEO of the surviving USA Networks entity, which will be called USA Interactive. Coupled with last week’s deal with EchoStar to develop and provide programming and services for EchoStar’s US satellite TV customers, the deal will give Vivendi a significant chunk of the US TV audience.
Commenting on today’s announcement, Jean-Marie Messier, chairman and CEO of Vivendi Universal said: “Our strategy is clearly coming together. Combining within the same operational entity, VUE, USG and the entertainment assets of USA creates a new U.S. major, which will benefit from the full integration of TV and movies activities with production and distribution. Along with our strategic partnership with EchoStar, this transaction fully addresses Vivendi Universal’s needs in terms of integration and distribution on the U.S. market….I also welcome Liberty Media Communication as a Vivendi Universal shareholder and a key partner as we expand our prospects in programming alliances in Europe.”
“At the end of just one year following our merger with Seagram and Canal+, we have put the pieces together in fulfilling our strategy. In one short year, we have focused on integration and addressing our relative distribution weakness in the U.S. – and here we are today. We expect that 2002 will be a year of growth, without further change in perimeter. At the same time, we will focus on the continuous improvement of our operational performance, increase our world leadership position in our key content units, and pursue the development of our distribution and aggregation through commercial agreements,” he concluded.
