LONDON (Brand Republic) – Vivendi Universal and News Corporation have agreed to merge their loss-making Italian pay-TV operations Telepiu and Stream.
News Corp’s Stream will be folded into Telepiu, which will be two-thirds owned by Vivendi pay-TV unit Canal+. The new company will retain the Telepiu name.
News Corp will be given an option to increase its stake in the company in 18 months and again in three years’ time.
Shares in Vivendi soared on the news of the deal, which coincided with the release of a strong set of first-quarter results.
The French group said that revenues at the media and communications group rose 10% to €5.9bn (£3.68bn) while Ebitda, or cashflow, grew 112% to €900m (£561.24m). The results were calculated as if the Vivendi Universal takeover of Seagram and the half of Canal+ it did not already own had taken place at the beginning of the year, the company said.
The company said it was ahead of cost-saving targets of €200m (£124.72m) for 2001 and stressed that it was confident of meeting its revenue growth target of 10% -- excluding Universal Studios Group -- and 35% Ebitda growth.
The group’s music division showed Ebitda grew 15% to €180m (£112.25m) on revenues of €1.4bn (£873m), up 3%. Its telecoms operations’ Ebitda tripled to €433m (£270.03) on revenues up 30%.
TV and film revenues rose 13% while Ebitda doubled to €284m (£177.11m), and its publishing business saw Ebitda increase 16% on revenues up 5.5%.
Vivendi Universal’s share price jumped €3 (£1.87) to €76.45 (£47.68) on the Paris Bourse this morning.