Vivendi CEO Defends U.S. Expansion

French media tycoon Jean-Marie Messier found himself on the defensive in his homeland this week as politicians and film producers voiced fears that Vivendi Universal’s U.S. expansion threatens the French film industry.

Messier, chief executive of Vivendi, dismissed the accusations, fueled by statements he made in New York last week that the French system of cultural protectionism is “dead.” Messier made the remark as the company announced its $10.3-billion acquisition of USA Networks’ entertainment assets.

French critics worry that Vivendi’s U.S. expansion, which also includes an 11% stake in EchoStar Communications Corp., could undermine the French movie industry, which is heavily supported by Vivendi’s pay-television venture Canal Plus.

“When I see what has been said and written in the last two days, I say to myself: ‘What a completely groundless accusation,”’ Messier told the newspaper Liberation.

Messier, recipient of the Legion of Honor, France’s most-prestigious award, said he plans to launch the first U.S. satellite channel dedicated to European films in 2002.

In other developments, Vivendi expects to close the $8.1-billion sale of the Seagram spirits and wine business to Britain’s Diageo and France’s Pernod Ricard today.

The sale of the liquor business comes a year after Vivendi got Seagram in a $30-billion deal that included Universal Studios.

The U.S. Federal Trade Commission initially blocked the deal on grounds that a combined Seagram and Diageo would dominate the rum market. But the agency’s objections were assuaged after Diageo agreed to sell its Malibu brand.

Vivendi will use proceeds from the sale to pay down debt and help fund recent acquisitions.

While beefing up its presence in the U.S. to compete with media giants such as AOL Time Warner Inc., Vivendi continues to expand its media and telecommunications business in Europe.

Canal Plus is close to buying Stream, the Italian pay-television business owned by Robert Murdoch, company officials said Thursday. Vivendi wants to merge the money-losing Stream into its own Italian venture, Telepiu, by the end of the month. Vivendi would reportedly pay $390 million for Stream, which has 650,000 subscribers.

Canal Plus Chief Executive Pierre Lescure said at a news conference in Paris that the combined entity would not break even until 2004.

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Reuters was used in compiling this report.