Vivendi Universal's Canal Plus and France Telecom confirmed Thursday they intend to merge their respective cable-TV operations. The resultant hybrid will boast 1.7m subscribers and connections to 4.3m households generating sales similar to market leader Noos' 2003 total of €400 million ($494.86m; £270.1m).
News of a merger plan was leaked last weekend although both parties played down the prospects for completion [WAMN: 15-Mar-04]. But agreement was far closer than implied, with the inking of a memorandum of understanding just four days later.
The merger was originally seen as a defensive move against the incursion into Gaul of US cable tycoon John Malone whose new European investment vehicle UnitedGlobalCom earlier this week sealed a €660 million deal to acquire Noos.
But defence may be the last thing on the happy couple's minds -- more likely the reverse. Once the cable businesses have merged, the French duo plan to sell 60% of the new business to a third party. And that might just be Malone.
The US entrepreneur has had a busy week. Not only did he add Noos to his trophy room, he also restructured his legion of US and foreign cable holdings into two geographically discrete companies. Some onlookers see the latter move as a preliminary to bidding for the Canal/FTel operation.
But this is by no means a foregone conclusion. Not least because of the French national reluctance to sell off the family silver!
Data sourced from: Financial Times; additional content by WARC staff