The Paris-based media giant Vivendi Universal has secured a coveted American outlet for its vast film and TV catalogue by buying the entertainment arm of USA Networks for at least $10.3 billion (€11.4 billion).
It was one of a handful of takeover deals - another was a plan by Amgen to buy rival Immunex and gain the popular rheumatoid arthritis drug Enbrel - that gave a boost to Wall Street and European bourses yesterday and sent share prices sharply up in early trading. Vivendi shares rose 6 per cent to €57.
USA Networks chairman, Mr Barry Diller, a billionaire media figure known for his aggressive management style, will head the new entity formed by the Vivendi purchase, to be called Vivendi Universal Entertainment, a task for which he said he would take no pay because he would enjoy it.
The new company, 93-per cent controlled by Vivendi, will combine USA's entertainment assets, including the USA and Sci-Fi channels and the popular series "Law and Order" and "Jerry Springer", with Vivendi's theme parks and Universal Studios, responsible for such blockbuster films as "Jurassic Park". USA Networks will change its name to USA Interactive.
Embarrassingly, Vivendi and USA Networks could not agree on the value of the deal. USA Networks said the value to its shareholders was $11.7 billion, $1.4 billion higher than the price tag announced by Vivendi.
Mr Diller effectively sold back to Vivendi television assets which he bought from Mr Edgar Bronfman, Vivendi's outgoing executive vice-chairman, for $4.1 billion in 1997.
In a separate deal, Vivendi agreed to invest $1.5 billion for a 10 per cent stake in US satellite TV operator EchoStar, which recently agreed to acquire Hughs Electronic, owner of the number-one satellite company DirecTV. The EchoStar-Hughs deal is opposed by the US National Association of Broadcasters representing local radio and TV stations and some members of Congress.
The purchase of USA Networks is a further incursion of foreign companies into the US entertainment and information industry, following Sony, Bertelsmann and Rupert Murdoch's News Corp.
