Vivendi lands USA Networks for $10.3 B

Sun, 12/16/2001 - 7:00pm
Anne Kerven

On the heels of its deal to supply EchoStar with iTV content and Canal+ Technologies middleware, Vivendi Universal announced it will acquire the entertainment assets of USA Networks for $10.3 billion.

Under the stock-and-cash deal, Vivendi Universal, parent of Canal+ Technologies, will own 93 percent of the resulting new company, dubbed Vivendi Universal Entertainment, comprised of Universal Studios Group and USA's entertainment assets.

Vivendi already owns $7 billion of USA stock, which it will sell through a limited liability company, accounting for 65 percent of the total, VU says. It also will trade 32 million treasury shares for part of Liberty Media Corp.'s share of USA Networks, totaling $1.65 billion. The deal also include $1.6 billion in cash, plus another $75 million in "various deferred payments," the company says.

Friday, the company announced an 8-year deal with EchoStar, under which it would supply EchoStar's U.S. DISH Network customers with programming and iTV services, including five new channels of basic and niche programming content. VU also will invest $1.5 billion in EchoStar, slated to help fund EchoStar's proposed merger with Hughes Electronics.

That deal also entailed a nonexclusive agreement under which EchoStar would use MediaHighway middleware from VU subsidiary Canal+ Technologies.

The nonexclusivity agreement is "always part of our contract," and is determined on a per-set-top-box basis, says Paris-based Canal+ spokeswoman Marie-Vincente Pasdeloup. "EchoStar has acknowledged we have a lot of knowhow in iTV," she says.

Pasdeloup says Canal+ is not commenting on the USA deal. In a statement, however, VU says both deals are part of its effort to integrate into and distribute in the U.S. market.

VU says USA stockholders will meet in mid-March and the deal will close shortly after.


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