Credit: Steindy/Wikimedia

Could Vivendi really buy Sky?

The French media giant is reportedly considering an offer for Rupert Murdoch's baby, but it would have to pay a high price.

by Jack Torrance
Last Updated: 17 Dec 2015

On the same day Shell announced plans to acquire BG in a  £47bn deal, it's emerged another mega-merger could be on the cards. French media company Vivendi, which owns Canal+ and Universal Music Group, is reportedly considering a bid for Sky in a bid to build a pan-European entertainment giant. According to Reuters, several sources said the company was looking to Sky as a potential way to expand the reach of its TV network after reviewing other options in Turkey and Europe.

It's easy to see why such a deal would be attractive to Vivendi. Sky's just beefed itself up with the acquisition of its German and Italian sister companies, and its profits were up 16% in its last halff-year results.

But it would cost Vivendi an arm and a leg, and probably another arm to boot. Sky has a market value of £17.6bn, but could cost Vivendi as much as £28bn thanks to its Sky-high debt pile, according to the sources.Sky's funded debt doubled to £7bn after the acquisitions. That didn't stop investors taking the bait though - the firm's shares were up 1.2% to 1,035p at lunchtime, after rising as high as 1,069p.

Vivendi began life as a water company and only got into media in the 1980s, but it's since become a major player. It acquired Universal Music, the largest record label group in the world, in 2006, and its Canal+ division is behind some of the biggest TV and film franchises, including Mad Men, 24, The Hunger Games, and Twilight. It's chaired by its largest shareholder Vincent Bollore, who also has interests in energy, transport and advertising.

'Ultimately what determines a deal is Vincent Bollore.' one of the sources told Reuters. Rupert Murdoch would probably have something to say about that.

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