Vivendi Universal chairman Jean Marie Messier is said to be in advanced talks with Barry Diller, his counterpart at USA Networks, about acquiring the latter’s entertainment assets.

Word is that a deal could be agreed by year-end, handing Paris-headquartered Vivendi the cable channels and film studios belonging to USA Networks, which in turn would be freed to focus on its interactive operations, such as the Home Shopping Network and Ticketmaster.

The French media mammoth currently has little programme production presence Stateside, a gap that would be rectified by a deal with USA Networks, maker of hit series Law & Order. Enthused one senior Vivendi executive: “Putting the entertainment assets of [Vivendi-owned] Universal Studios and those of USA Networks together makes tremendous sense.”

Vivendi holds 43% of the American group, with John Malone’s Liberty Media owning a further 21%. Diller, however, retains voting control. The trio are thought to have been in talks for nearly a year, with speculation that Messier may also be eyeing Liberty’s production assets.

Any agreement between Vivendi and USA Networks is likely to involve the swapping of assets rather than cash. Messier admitted the two parties were in talks but rejected press reports of an $18 billion price tag for the entertainment businesses as “absurd”.

“We confirm that discussions have been ongoing for several months between Vivendi and USA Networks with a view to optimising synergies in the entertainment area,” he continued. “These talks at their current stage may or may not lead to a transaction”

News sources: The Times (London); Financial Times; BBC Online Business News (UK)