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Deal is part of Vivendi's major overhaul

After years of confrontations, Vivendi and Lagardere, two Paris-based media congloms, have finally reached an agreement, putting an end to their joint ownership of Canal Plus France, Gaul’s pay TV leader.

Vivendi agreed to buy out Lagardere’s 20% share in Canal Plus for €1.02 million ($1.4 billion).

Lagardere had been eager to sell its stake in Canal Plus France to Vivendi for some time, but negotiations had failed over the pay TV group’s valuation.

Listed on Paris’ stock market, Vivendi’s share rose 0.4% to 18.79 Euros ($26) on Tuesday morning, while Lagardere’s climbed 1% to $36.2

According to Liberum Capital, Vivendi will boost its earnings per share 5% thanks to the transaction.

The buy-out puts an end to legal disputes between the two companies. Last February, Lagardere sued Vivendi over the cash management of Canal Plus France. Vivendi then hit back, claiming it would sue Lagardere for abuse of legal process and seek damages.

The two companies stated in a joint release that they will nevertheless continue to collaborate on program production, as well as the publishing and distribution of TV channels.

Canal Plus France is Europe’s second biggest pay TV operator, after BSkyB, and is best known for its strong original programming, notably premium drama. Its slate includes “Braquo,” “Spiral” and “The Returned,” which is vying for an International Emmy Award award.

Deal is part of Vivendi’s major overhaul. It recently sold 85% of its interest in vidgame company ActivisionBlizzard, the group’s main profit driver, for $8.2 billion; and could soon divest SFR, the struggling French telco, according to various reports.

John Hopewell contributed to this report.

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