Vivendi Universal: In a Strategic Flux

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Vivendi under Messier Contd...

In 1997, the company acquired a 47.5% stake in the New Zealand based United Water. CGE also bought a 30% stake in Havas and bought NetHold, the second largest pay TV operator in Continental Europe. These acquisitions helped the company strengthen its position in the communications sector. In the same year, Cegetel and SNFC (French National Railroad) formed a subsidiary, Télécom Développement. The objective of forming the subsidiary was to operate an alternative telecommunication network (apart from SFR and Cegetel) throughout France. CGE expanded its European operations by increasing its presence in the German rail passenger transport market by acquiring the second largest transportation company in Scandinavia, Linjebuss. In 1998, CGE bought full-ownership of Havas. The company also bought Cedent software, a leading US-based entertainment and education software provider, and Anaya, the second largest education and multimedia publisher in Spain.

Messier changed the name of the company to 'Vivendi', inspired by the Latin word vivere, which means 'to live'. The name CGE was retained to refer to the original business of water management. The new name was adopted to reinforce the company's mission to 'improve the standard of living for everyone' and the company's 'commitment to life, strength and mobility.'⁵ According to company sources, Vivendi relied on three pillars: regional development, environment management and communications. By 1998, Vivendi emerged as a global corporation employing 220,000 people with worldwide sales of 205 billion FRF (Refer Exhibit II for the company's financials from 1996-2000).

On a Buying and Selling Spree

During the next couple of years, Vivendi acquired and sold business at a very rapid pace; the communications business especially witnessed a lot of reshuffling under Messier's supervision. In 1999, Vivendi sold the outdoor advertising operations of Havas to J C Decoux of France and bought a 30% stake in Elektrim Telekomunikacja, a Polish telecommunications company. In the same year, Vivendi acquired a 23% stake in BskyB, a UK-based broadcasting company (the stake was sold off later due to pressures from the European Commission).

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5] As mentioned in the company's website www.vivendi.hu.