LONDON (Brand Republic) - Vivendi Universal is understood to be in talks with News Corporation about merging their respective Italian pay-TV interests, Telepiu and Stream.
Both companies’ Italian pay-TV units are reported to be losing money and experts say the market is not big enough for two operators.
However, an agreement could be difficult to reach because the two media giants are believed unlikely to be able to agree ownership terms of the merged entity.
If control was awarded based on subscriber numbers, Vivendi would control two-thirds of the company to News Corp’s one third.
News Corp chairman Rupert Murdoch is thought unlikely to relinquish control to rival Vivendi CEO Jean-Marie Messier, while Murdoch would have to inject around $500m (£350.31m) to increase his share to 50%.
The deal could also be obstructed by anti-trust authorities, which may be opposed to one pay-TV operator controlling the Italian market.
It is also believed likely that Telecom Italia, News Corp’s partner in Stream, would pull out of the operator.