The European Commission has approved the acquisition by French
telecoms and media company Vivendi and its subsidiary Canal+ of
Canada's Seagram. The Commission had been concerned that the deal
would have strengthened Vivendi/Canal+'s dominant position in
pay-television in France, Spain, Italy, Belgium and the Netherlands
and created a dominant position in the same market in the Nordic
region.
The pooling of Seagram's Universal music arm and Vivendi's
multi-access Internet portal Vizzavi also raised concerns. To
reassure the Commission, Vivendi undertook to divest its stake in
BSkyB and to give rival pay-TV operators access to Universal's
films.
Vivendi announced in June it was buying Seagram. The deal was
notified to the European Commission for regulatory clearance.
Following its market investigation and the examination of a
significant number of complaints the Commission found that the
transaction as notified significantly affected three markets,
namely pay-TV, the emerging pan-European market for portals and the
emerging market for on-line music.
By adding Universal's music content to Vivendi's multi-access
portal, Vizzavi, the transaction raised serious doubts as to the
creation of a dominant position on the emerging pan-European market
for portals and on the emerging market for on-line music. In order
to remove these concerns, Vivendi offered to give rival portals
access to Universal's on-line music content for five years.
The Commission has now declared the merger compatible with the
European common market.
Although the Commission last week granted conditional approval
to the AOL/Time Warner merger, the Washington Post reports that US
regulators will block the $245 billion deal unless an agreement is
reached on internet access to ensure that rival ISPs would have
access to its high speed cable network. The parties have until 27th
October to reach agreement.
