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Vivendi, Mediaset to take on Sky, Netflix

Vivendi and its Italian counterpart Mediaset have inked a deal that sees the French media giant take over its Italian counterpart’s pay TV division, Mediaset Premium.

The pair will also team on production and TV streaming services, in a major push that will see them take on the likes of European pay TV giant Sky. They will also provide a greater challenge to Netflix and Amazon Prime Instant Video by creating a ‘global over-the-top television delivery platform’.

The deal sees the firms exchange a 3.5% equity stake in each other’s businesses and Vivendi take over Mediaset Premium.

Crucially, that service, which is distributed via DTT and IPTV platforms has local rights to the Champions League football tournament.

Vivendi already has the Canal+ and CanalSat pay TV services in France and the Watchever OTT service in Germany. It also owns the rapidly expanding TV and movie production and distribution business Studiocanal. It also launched a new premium mobile content service last week.

The company said the deal gives it 13 million subs in Europe and “confirms Vivendi’s intention to build strong positions in Southern Europe, a market that shares a similar Latin culture and roots”.

“The deal between Vivendi and Mediaset is a potential game changer,” said Paolo Pescatore, of CCS Insight. “Vivendi is therefore now positioning itself as a content powerhouse in Europe. Sky’s move to consolidate its position in Europe has arguably triggered this move as the media industry continues to see a wave of corporate activity.

“Similarly, pay TV providers have come under significant competitive pressure with the arrival of OTT providers like Netflix and telcos adding TV/video services as part of a multiplay offer.”

The deal needs rubber-stamping by regulators and will close in the next few months, Vivendi said.

Rumours that Vivendi was in for Mediaset’s pay TV operations originally surfaced earlier this year.