April 18, 2017/ By Variety
Italian media regulator Agcom has ruled that French media conglomerate Vivendi’s expansion into Italy where it has built large stakes in both Telecom Italia and broadcaster Mediaset violates the country’s anti-trust laws and given Vivendi one year to reduce its stake in one of the two companies.
The decision marks a victory for Mediaset which has been battling with Vivendi in court after the group chaired by billionaire Vincent Bolloré last year pulled out of an $860 million deal to buy Mediaset’s pay-TV unit and a few months later gained a nearly 30% stake, and significant shareholder voting rights in Mediaset, with rapid fire share purchases.
Agcom in December opened a probe into Vivendi’s aggressive purchase of Mediaset shares after Fininvest, the holding company of the TV group controlled by former Italian prime minister Silvio Berlusconi, filed a complaint.
Vivendi also controls a 24% stake in Telecom Italia, which it started building in 2015.
The regulator late on Tuesday said Vivendi held significant influence and excessive shares in Italy’s telecommunication and media markets, which breach the country’s media laws. Those laws were put in place when Berlusconi was prime minister to prevent dominance of a single media player.
Agcom ordered Vivendi to present a detailed plan within 60 days as to how it will comply with the ruling.
Vivendi in a statement said it was surprised and is mulling filing a formal complaint to the European Commission and also an appeal to an Italian regional court.
“Vivendi has always operated within Italian law, and specifically the Gasparri Law regarding the protection of media pluralism from the creation of dominant positions,” the group said.
“(…)Vivendi neither controls nor exercises a dominant influence on Mediaset which is controlled on an exclusive basis by Fininvest with a stake close to 40 percent,” it added.
Mediaset instead praised the ruling in a statement and said it was waiting to read it in full before deciding “future action.” Mediaset’s next step is expected to be legal action to freeze Vivendi’s voting rights in the broadcaster.
Meanwhile uncertainty over how the battle will play out has caused share value in both companies to drop. Mediaset was down by 2.29% and Telecom shares had lost 1.03% in mid-morning trading Wednesday on the Milan bourse.
According to analysts the ruling may now force Vivendi to seek a resolution with Mediaset in coming weeks. One scenario is that they could even perhaps revive the partnership that went sour after the Mediaset Premium deal, albeit in a different form.
Vivendi supervisory board member Tarak Ben Ammar, who brokered the initial deal said recently he was willing to act as mediator. “If they want me I’m always ready to help friends, if they want to stick with lawyers then they don’t need me,” Ben Ammar, who has a close rapport with both Berlusconi and Bolloré, told journalists in Milan last month.