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New blow for Mediaset merger plan as Vivendi appeal upheld

French media group Vivendi has won an appeal in an Amsterdam court against Italy-based commercial broadcaster Mediaset’s MediaForEurope (MFE) project, which aims to unite its domestic and Spanish business interests into a Dutch holding company.

The court ruling is the latest in what has become a lengthy battle between Vivendi and Mediaset dating back to when the former backed out of a deal to buy the latter’s pay-television unit in 2016.

In June 2019, Mediaset announced the creation of MFE, owning stakes in leading European media groups, as part of its strategy to build a pan-European portfolio with access to major markets, tackling competition from streaming services such as Netflix.

Vivendi holds a 28.8-per-cent stake in Mediaset and is concerned the governance structure of the new entity would strengthen the hold of the Berlusconi family on the company.

The Amsterdam ruling deals another blow to Mediaset’s plans after a Madrid court in July confirmed a suspension of the process. Following that ruling, Mediaset elected to withdraw the merger plan, but stated its strategy remained valid and that it would approach it through “new ways”.

Following the Amsterdam verdict, Mediaset said: “The Court of Amsterdam has overturned the first level judgement, and accepted the appeal lodged by Vivendi requesting the suspension of the merger project between Mediaset and Mediaset España.

“The Dutch court also requested changes to the structure of the plan which, in fact, for Mediaset was already no longer practicable following the judgement of the Court of Madrid of 30 July 2020.”

Vivendi told the Reuters news agency it is “very pleased” with a decision it believes to be “in the interest of all of Mediaset’s shareholders”.

Vivendi’s interest in Mediaset has also been the subject of a separate ruling issued today (Thursday). The European Union’s Court of Justice has ruled that a declaration made in 2017 by Italy’s communications watchdog, AGCOM, forcing Vivendi to forfeit two thirds of its stake in Mediaset, violates the bloc’s rules concerning media pluralism.

AGCOM had ruled that Vivendi’s stakes in Mediaset and Telecom Italia broke regulations designed to prevent concentration of power. Vivendi was ordered to reduce one of its holdings to below 10 per cent, a verdict that the company challenged but sought to comply with by moving two-thirds of its voting rights in Mediaset into an arm’s-length trust.

The Court of Justice has ruled that AGCOM’s decision acted to excessively limit the rights to do business anywhere in the EU, when compared to the need to maintain a variety of players in the media sector.