French conglomerate Vivendi steadily whittled away at its once-extensive portfolio after coming close to collapse in the early 2000s. Its main focus now is on broadcast media and music. It owns France's leading pay-TV service Canal+, as well as the global music giant Universal Music. Numerous other subsidiaries were divested. Most notably, the group's substantial telecoms assets were sold in 2014, including mobile company SFR to cable company Numericable. A year earlier, the group sold its remaining shares in global gaming giant Activision Blizzard. However, Vincent Bolloré became chairman of Vivendi in 2014, and is also its biggest shareholder, having steadily increased his holding to over 20% of voting shares by Oct 2016. In an apparent u-turn, he has returned the group to both telecoms and gaming, accumulating what is now a controlling 25% stake in Telecom Italia, outright ownership of mobile game developer Gameloft via a hostile takeover, and a significant minority stake in French videogame developer Ubisoft. Revenues for the slimmed down group in 2016 were E10.82bn. Arnaud de Puyfontaine is group CEO. Bolloré's family company had also been controlling shareholder in marketing group Havas, itself once part of Vivendi, prompting speculation that the two businesses might eventually be reunited. Vivendi finally made a bid to acquire the Bolloré Group's stake in Havas in May 2017 for E2.36bn. As a result of a subsequent tender offer to minority holders, Vivendi had accumulated 95% of Havas by October. Vivendi was created in the late 1990s by dynamic new chairman Jean-Marie Messier, who transformed what was then the utilities group Compagnie Generale Des Eaux into a global media giant. But the newly renamed Vivendi Universal accumulated huge debts in the process, leading to a series of escalating losses. Misjudged management decisions and an impending cash crisis led to the ousting of Messier (as well as fines and a suspended jail sentence), and a new management team was appointed to dismantle the mess he left behind, selling off utilities division Veolia and entertainment group Universal Studios among other businesses. Adbrands no longer profiles this company but subscribers may access account assignments and contact information. The searchable account assignments database is available to full subscribers to Adbrands.net premium services.
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Capsule checked 21st March 2016
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Adbrands Weekly Update 18th May 2017: As widely anticipated for at least a year, the Bolloré clan have taken steps to consolidate control of their entertainment and media interests. Media giant Vivendi, chaired and 20%-controlled by Vincent Bolloré, has offered to acquire the 60% stake in Havas Group held by his private vehicle Bolloré Group for E2.36bn. Havas is of course run by Bolloré's son Yannick Bolloré. The combination would, ironically, reunite two businesses that were already at one time stablemates. The original core of what is now Vivendi was the old Agence Havas media and marketing group. One of Vivendi's few remaining holdovers from the original Havas business is its controlling stake in pay-TV platform Canal+, and this has been joined by Universal Music as well as various telecoms and computer gaming interests. In a memo to Havas staff Yannick Bolloré emphasised the potential synergies between the two groups. "Our groups evolve in the same environment, some of our teams already collaborate and our cultures are similar and complementary... Our clients expect us to come up with innovative solutions and having privileged access to Vivendi's prestigious assets would enable us to create unique offerings and services all over the world." Yet regulatory approval is by no means guaranteed, since the merger would combine dominance in multiple influential communications media. Departing Publicis CEO Maurice Levy complained that this would represent a return to 1980s-style conflicts of interest: "I’m not sure advertisers will like that they lose neutrality in their recommendations." Vivendi said that Havas would have to bid against other agencies for access to its media channels. Yet combination would seem to directly contravene France's Loi Sapin, introduced in 1993 to increase media transparency, which prevented agencies from acting as both buyer and seller of ad space. That law will be expanded next year to cover digital media, currently excluded from its remit. As a result, Havas could theoretically be barred from buying any advertising space on Canal+ or the group's other broadcast and digital channels. Clearly we're entering new territory here. As Sir Martin Sorrell told the Advertising Week Europe conference as long ago last year, Bolloré is a "fascinating example of someone who owns media, content and a telecoms platform, and an agency. It’s never been done before".
Adbrands Weekly Update 20th Apr 2017: Media tycoon Vincent Bolloré, controlling shareholder in Vivendi and Havas, was ordered by regulators to reduce his stake in Italian media giant Mediaset. Bolloré has accumulated a hostile stake of almost 29% in Mediaset, the investment vehicle of former prime minister Silvio Berlusconi, after the two men fell out over a earlier agreement. Bolloré also controls the country's main phone company Telecom Italia via a 25% stake. Italian law forbids telecoms companies with more than 40% local share from also controlling more than 10% of the country's media. Mediaset has over 13% share.
Adbrands Weekly Update 2nd Mar 2017: For all Vincent Bolloré's big talk in 2016, and the aggressive targeting of Italian counterpart Mediaset and software group Ubisoft, annual results for his Vivendi media group were actually rather disappointing. Revenues edged up by just 0.5% to E10.8bn and earnings slumped by 35% to E1.3bn. The previous year was boosted by one-off gains from divestments, but even with those benefits stripped out, EBIT fell year on year. In fact, 2016's modest revenue increase was entirely the result of currency fluctuation. Paper gains in Universal Music as a result of increased income from music streaming were offset by further declines at French pay-TV service Canal+. Even Universal's uplift was disappointing. Latest market share figures show a decline in its share of the global recorded music market to a little under 29% for 2016, compared to almost 37% three years earlier. Revenues of E5.3bn were worth $5.8bn at average exchange rates for 2016, whereas Universal's 2014 revenues of E4.6bn were worth over $6.0bn.
Adbrands Weekly Update 15th Dec 2016: The bromance between European media moguls Vincent Bolloré and Silvio Berlusconi came to a definitive end this week after the former began buying shares in the latter's Mediaset group through the markets. Within the course of three days this week, Bolloré-controlled Vivendi accumulated a stake of 20% in the Italian group. Berlusconi called the move a hostile takeover and lodged a complaint with Italian regulators, while also raising his family shareholding in Mediaset to almost 40%. The two men originally formed a strategic alliance in Spring this year with an agreement for Vivendi to take control of Mediaset's pay TV channels; however, the French group later tried to back out of the deal, delaying completion and prompting legal action from the Italians. This hold-up led to a sharp decline in Mediaset's share price, which fell by almost 40% between April and November, setting the stage for Vivendi to leap in now with a hostile approach. The key asset is not Mediaset's struggling pay TV business, but its extensive free to air broadcast assets in both Italy (where it has 55% of local TV advertising through Italia 1 and 2, Channel 5, Rete4 and La5) and Spain (45%, through Telecinco and Cuatro).
Adbrands Weekly Update 9th Jun 2016: The Guillemot family accepted defeat in their battle to defend the smaller of their two games development companies, Gameloft, from predator Vivendi. The larger group had already accumulated 56% of Gameloft's voting stock in a tender offer. This week, the Guillemots reluctantly agreed to surrender their own 22% holding. The stage is now set for a new battle over the much bigger Ubisoft, one of the leaders in global computer games with franchises such as Assassin’s Creed. Vivendi has acquired an 18% stake, and although it said it has no plans to seek control within the next six months, the Guillemots are circling their wagons in expectation of an attack.
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