Vivendi to sell BSkyB and bag Seagram

Vivendi, the French conglomerate, yesterday agreed to sell its 23 per cent stake in BSkyB, worth £4bn, within two years as one of three conditions for the European Commission's approval of its $34bn (£23bn) takeover of Seagram, the Canadian entertainment and drinks group.

Vivendi, the French conglomerate, yesterday agreed to sell its 23 per cent stake in BSkyB, worth £4bn, within two years as one of three conditions for the European Commission's approval of its $34bn (£23bn) takeover of Seagram, the Canadian entertainment and drinks group.

The lengthy timeframe of the forced share sale may help mitigate against a further downturn in BSkyB's share price, which has slid more than 60 per cent since the spring. The sale may, however, threaten the media mogul Rupert Murdoch's plans for a $40bn flotation of News Corp's worldwide satellite broadcasting assets. News Corp owns 39 per cent of BSkyB.

Vivendi and Seagram gave Brussels two further undertakings related to cinema rights and music distribution.

In the cinema area, the enlarged group will share 50 per cent of the cinematic rights of Seagram's Universal studios division with Canal Plus's competitors in those countries where the pay-TV business operates. In music, the combined business will give rival internet portals access to Universal's online music for five years.

The deal with Brussels marks a major coup for Jean Marie Messier, Vivendi's mercurial chief executive. Earlier this month, Mario Monti, the EU competition commissioner, forced Time Warner's music subsidiary and EMI to scrap a joint venture that would have reduced the number of big competitors in the music industry.

The new entertainment giant, Vivendi Universal, will have interests ranging across music, film production, US cable television and European pay-TV.