January 31, 2018 / 6:49 PM / a year ago

Build European champions or be doomed, Vivendi CEO says

MILAN (Reuters) - Europe needs to build strong cross-border champions in media and telecoms or else it will by swallowed up by competitors from across the Atlantic or China, the chief executive of French media group Vivendi (VIV.PA) said on Wednesday.

Vivendi's Chief Executive Officer Arnaud de Puyfontaine attends the 2018 Reuters Breakingviews Predictions event in Milan, Italy, January 31, 2018. REUTERS/Alessandro Garofalo

Vivendi has invested over 5 billion euros (£4.37 billion) in Italy over the past few years, building up a stake of 24 percent in Telecom Italia (TIM) (TLIT.MI) and becoming the Italian phone group’s biggest investor.

Vivendi also accumulated a stake of just under 30 percent in Italian broadcaster Mediaset (MS.MI) which is controlled by the family of former Italian Prime Minister Silvio Berlusconi.

Vivendi has long said it is a long-term investor in Italy and wants to use its investments to build a southern European media and content empire to rival the likes of Netflix (NFLX.O).

But the French media group’s growing influence at TIM - a former state phone monopoly with some assets that are considered to be of national importance - has raised concerns in Rome and led to questions about Vivendi’s ultimate goal in the country.

“We need to build strong European players. If not we are doomed,” Arnaud de Puyfontaine, who last year was also appointed TIM’s executive chairman, said on the sidelines of a Reuters Breakingviews event in Milan.

“We are competing against giants... Google, Apple, Time, Disney and Netflix... if we don’t want to be swallowed by those big giants, not to name the Chinese ones ... we have to have a European agenda. This agenda is a must,” he said.

“And we are not talking about 30 years from now. This is something that is going to play out in the next five years.”

De Puyfontaine said he remained bullish about Italy and TIM.

Last year Italy said it wanted a say in some of TIM’s strategic decisions on assets which Rome deems to be of national importance in a move seen as a way of reining in Vivendi’s influence.

Earlier on Wednesday, de Puyfontaine said he was confident of resolving outstanding issues between the former state phone monopoly and the Italian government to enable a new era of improved relations.

“The proof of the pudding is in the eating, but I’m bullish about Italy,” he said.

Reporting by Agnieszka Flak; Editing by Susan Fenton

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