Vivendi will acquire Mediaset's pay TV arm and take a stake in the Italian broadcaster as part of French tycoon Vincent Bollore's plan to build a European media giant to rival US streaming powerhouse Netflix. The partnership will see the companies swap 3.5 percent stakes in a "strategic alliance" aimed at "capturing new opportunities across the international competitive landscape," Mediaset said in a statement Friday.
France's Vivendi will take complete ownership of Mediaset Premium, the Italian company's loss-making pay TV arm, acquiring Mediaset's 89 percent stake and the 11 percent held by Spain's Telefonica. Mediaset Premium, which has the right to broadcast Champions League football matches until 2018, had 2.01 million subscribers in late December, against 1.7 million six months earlier.
By comparison, competitor Sky Italia has 4.7 million. Vivendi, which already owns leading French pay TV channel Canal+ and Universal Music Group, said in a statement the move "greatly expands its presence in European pay-television" and increases its global individual subscriber base to more than 13 million. "The agreement with Mediaset confirms Vivendi's intention to build strong positions in southern Europe, a market that shares a similar Latin culture and roots," it said. Mediaset, whose shares climbed 5.4 percent Friday pending the agreement, said the project with Vivendi would allow the emergence of a new major content player.