Displaying items by tag: Vivendi
French media group Vivendi declared on August 7 that it “does not exercise any de facto control over Telecom Italia” under Italian law, following a request by Italy’s market watchdog Consob to confirm the matter.
The company’s growing influence in Italy’s telecom sector has come under scrutiny since it bought a stake of 24 percent in Telecom Italia and took 29 percent of the country’s largest commercial broadcaster, Mediaset.
If Vivendi said it effectively controls Telecom Italia, it would be forced to consolidate the group’s debt pile of 25 billion euros into its accounts and would give the Rome government the right to step in as it is allowed to do for companies of national interest, Il Sole 24 Ore reported.
Vivendi denied having de facto control of Telecom Italia in a press release saying its participation in the company is “not sufficient enough to allow it to exercise, on a stable basis, a dominant influence at Telecom Italia shareholders’ meeting.”
In this respect, it added, “all empirical data – including attendance at the ordinary shareholders’ meetings of Telecom Italia held between June 22, 2015 through May 4, 2017, the shareholdings held by the various investors and the results of the voting on resolutions – unequivocally reveal that Vivendi is not in a position to control Telecom Italia ordinary shareholders’ meetings.”
Vivendi’s statement came two months after it received the conditional approval from European Union antitrust authorities for its plan to gain control of Telecom Italia.
Telecom Italia said recently that its board on July 27 had acknowledged that Vivendi was “directing and coordinating” the operator. However, Telecom Italia never specifically addressed where the media group had total control over it, Reuters said.
The Italian government was also looking into whether Vivendi breached an obligation to inform Rome of its “direction” role at Telecom Italia, which is a requirement for organizations that are considered a strategic national asset.
Italian telecommunications incumbent Telecom Italia has appointed a new general manager – in a move that sees its largest shareholder tighten its grip on the operator. Vivendi’s Amos Genish will now run the company’s day-to-day operations.
Vivendi has a 24% stake in Telecom Italia, and the new appointment comes just days after CEO Flavio Cattaneo departed the company after just sixteen months at the helm, following a number of clashes with the French shareholder.
The new general manager has enjoyed a decorated career, he was CCO at Vivendi, and he formerly headed the Brazilian subsidiary of Spanish operator Telefonica, and also founded GVT, a leading Brazilian mobile operator. Genish, a 57 year-old former Israeli captain will now oversee all of the company’s operations and will be based in Rome.
Cattaneo is the second CEO to leave Telecom Italia in less than just two years after he repeatedly locked horns with the French group which is led by billionaire Vincent Bollore. He has previously expressed an ambition to establish a southern European media powerhouse. Vivendi CEO, Arnaud de Puyfontaine who also acts as Telecom Italia’s executive chairman - will assume the responsibilities of CEO on a temporary basis.
In addition to this, it was also disclosed that further announcements on governance will be made in September. Analysts have claimed that many investment funds that have shares in Telecom Italia, remain unflustered by the latest leadership reshuffle, and are confident that Genish can reinvigorate the operator with a number of deals, which may include a possible sale of the Brazilian unit to a spin-off of the Italian fixed-line network.
De Puyfontaine has admitted that he plans to establish a joint-venture between Telecom Italia and Vivendi’s pay TV unit Canal+, which would play into the French company’s vision of expanding its content distribution across platforms. The Italian operator’s only asset abroad remains its Brazilian unit, and de Puyfontaine said it was doing a good job, but remained coy in relation to a potential sale.
The idea of TIM exiting Brazil has been gaining traction among investors since Vivendi became a top shareholder, because the French group sold its own Brazilian operations before investing in Italy.
The CEO of Telecom Italia is set to accept a severance package rumored to be worth around €30m to pave the way for his imminent departure from the organization. Speculation has been rife for a number of months in relation to unrest between the CEO of the Italian incumbent Flavio Catteneo and its largest shareholder Vivendi.
It has emerged that Catteneo is expected to leave the Italian operator by mutual consent after negotiating the terms of the severance package. Vivendi which controls the operators board has been at loggerheads with the CEO for the past number of months, and a source close to Telecom Italia said the situation had become untenable for both parties, claiming ‘something had to give’.
Some shareholders have expressed their criticism to the amount the outgoing CEO will receive for his severance pay-off. However, the CEO was quick to defend the sum pointing out the list of successes he had delivered for the telecommunications colossus.
It has also been reported that Telecom Italia will hold a meeting of its Nomination of Remuneration Committee with only one item listed on the agenda, which is the examination of a proposal of mutual termination of the relationship of the company and Mr. Flavio Catteneo.
However, it was only a few weeks ago, a defiant Catteneo announced his intentions to remain on as CEO until the end of 2020, dispelling rumors he was set to quit the operator. Reports circulated that Vivendi had already lined-up a three-pronged leadership team to replace the CEO.
Tensions continued to soar, but the relationship completely broke down when it emerged that Vivendi planned to appoint its CCO Amos Genish as Telecom Italia’s new Managing Director in order to work alongside Catteneo.
The latest high-profile departure represents a recurring and worrying trend at Telecom Italia. Catteneo’s imminent exit means that the Italian telecommunications colossus will now have its third CEO in just two years. Marco Patuano left the firm in March, 2016, amidst reports of clashes with Vivendi. The French company which is the operator’s largest shareholder is increasingly attempting to extend its control on the operator.
Vivendi now is total control of both the Telecom Italia board and installed its own CEO Arnaud de Puyfontaine as the chairman of the operator earlier this year. In addition, the company gained permission from the European commission to assume control of the operator in May 2017.
However, the company’s progress has not gone unnoticed by Italy’s authorities. Italian regulator Agcom ordered Vivendi to cut its stake in either Telecom Italia or broadcast firm Mediatek in April, to meet stringent Italian media ownership rules. Vivendi is contesting the decision.
The European Commission has approved the acquisition of de facto control over Telecom Italia by Vivendi. The decision is conditional on the divestment of Telecom Italia's stake in Persidera.
Telecom Italia is an Italian company, which provides voice and data services through mobile and fixed technologies, digital content services and IT services to enterprises. It is also active, through its subsidiary Persidera (a joint venture with Gruppo Editoriale L'Espresso), in the market for the wholesale access to digital terrestrial networks for the broadcast of TV channels.
Vivendi is a French company, which controls a group of companies active in the music, TV, cinema, video sharing and games businesses. Vivendi's affiliate company, Havas, is active in the advertising industry in Italy. Vivendi holds a significant minority stake in Mediaset, which is also active in the market for the wholesale access to digital terrestrial networks for the broadcast of TV channels.
The Commission found that, post-transaction, Vivendi would have had an incentive to raise prices charged to TV channels in the market for wholesale access to digital terrestrial television networks, where Persidera and Mediaset each hold a significant share.
The benefits of such a strategy would be obtained either directly through Persidera or indirectly via the minority shareholding in Mediaset, since other players active in the market do not represent a viable alternative for TV channels. As a result, TV channels would have found it more expensive to reach their audiences in Italy.
The Commission also investigated whether the relationship between Vivendi's activities in Italy in advertising, music, TV and mobile gaming and Telecom Italia's activities in fixed and mobile telecommunications raised competition concerns. In this respect, the Commission concluded that Vivendi would not have the ability or incentive to shut out other competitors from the relevant markets.
In order to address the competition concerns identified by the Commission, Vivendi committed to divest Telecom Italia's stake in Persidera. In view of the remedies proposed, the Commission concluded that the proposed transaction, as modified, would not significantly reduce competition in the European Economic Area (EEA) or any substantial part of it, including Italy. The Commission's decision is conditional upon full compliance with the commitments.
The Commission has exclusive jurisdiction to assess the impact of the proposed transaction on competition in the various markets affected within the EEA. However, the EU Merger Regulation recognizes that Member States may take appropriate measures, including prohibiting proposed transactions, to protect other legitimate interests, such as media plurality. A media plurality assessment typically looks at wider concerns about whether the number, range and variety of persons with control of media enterprises are sufficiently diverse.
In a decision issued on 18 April 2017, the Italian Communications Authority (Autorità per le Garanzie nelle Comunicazioni, 'AGCOM') found that Vivendi's position in the Italian markets for media and content is in violation of Italian media plurality rules.
As the Commission's investigation and findings concern solely the competition aspects of the proposed transaction, the Commission’s conditional clearance decision is without prejudice to the Italian media plurality review process.