News flash associated press Vivendi

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    Vivendi agrees to sell Italian pay-TV unit to Murdoch's News Corp.

    The Associated Press
    6/8/02 6:16 PM

    PARIS (Dow Jones/AP) -- Vivendi Universal said Saturday it has agreed to sell its Italian pay-TV operations to Rupert Murdoch's News Corp. in a move to reduce its heavy debt.

    The French media and utilities conglomerate said it plans to sell Telepiu, the Italian arm of its loss-making pay-TV unit Canal Plus, to its Australian rival, ending of a year of uncertainty about the Italian company's future.

    Vivendi Universal said in a statement that the deal is worth $1.4 billion. News Corp., in a separate statement, put the value at about $950 million.

    Vivendi said the deal, when completed, would reduce its total debt by $1.1 billion.

    Jean-Marie Messier, Vivendi's embattled chairman, has sought to restructure Canal Plus ever since he dismissed Canal Plus head Pierre Lescure in April. Messier hopes to turn around Canal Plus, one of the largest pay-TV companies in Europe, within two years.

    "The transaction illustrates our commitment to rapidly reducing Vivendi Universal's debt," Messier said in a statement.

    Apart from the French channel Canal Plus, Telepiu was Canal Plus' biggest venture. Operations in Poland, Nordic and Benelux countries are negligible

    The sale would mark the end of Vivendi's ambition to create synergies between Canal Plus subscribers in Europe and content produced by its U.S.-based division, Universal.

    News Corp. and Vivendi, whose relation has been rocky, said Saturday that they will now compete fairly. Notably, current lawsuits opposing the two companies will be dropped.
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