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ROME – French media conglomerate Vivendi on Tuesday vowed to forge ahead with its ambitions to make Italy a central plank of its strategy to create a southern European media powerhouse, despite regulatory setbacks from Italian authorities and a rancorous dispute with leading commercial broadcaster Mediaset.

During the company’s annual shareholders meeting in Paris, Vivendi Chief Executive Arnaud de Puyfountaine said that Vivendi’s investments in Mediaset and in Telcom Italia, Italy’s top telco, were “crucial” to building a “Latin media powerhouse” combining content creation and distribution.

“Our ambitions in Italy remain unvaried,” de Puyfountaine said. He dismissed concerns that a ruling by Italian media regulator Agcom, which ordered Vivendi last week to cut its stake in one of the two companies in order to comply with anti-trust laws, would be an impediment.

De Puyfontaine called Telecom Italia, in which Vivendi is the top shareholder with a 24% stake, “a long-term investment” and noted that it serves the purpose “of reinforcing our presence in Italy, a market with a huge potential.”

As for Mediaset, “our alliance did not start out on the best basis, but we want to re-establish a constructive and long-lasting rapport,” de Puyfontaine told the shareholders meeting.

He did not elaborate on how Vivendi plans to mend fences with Mediaset. The two companies have been battling in court since Vivendi last year pulled out of an $860-million deal to buy Mediaset’s pay-TV unit. Shortly afterward, Vivendi aggressively bought shares in Mediaset, increasing its stake to nearly 30% and boosting its shareholder voting rights.

Last week’s ruling by Italian regulators was prompted by a complaint from Fininvest, the holding company of the TV group controlled by former Italian Prime Minister Silvio Berlusconi.

According to Italian financial daily Il Sole 24 Ore, Vivendi could comply with the ruling by simply agreeing to have part of its voting rights in Mediaset frozen so that its voting power would be equivalent to no more that a 10% ownership share. It could do this without actually having to shed any of its 30% chunk of stock.

Asked by a shareholder about Mediaset, Vivendi head Vincent Bolloré took issue with the regulators’ ruling, saying, “I don’t understand how we can control Mediaset, since it is controlled by the Berlusconi family.” But he added that, “in any case, we will comply.”

Vivendi says that it is considering filing a formal complaint to the European Commission and also an appeal to an Italian regional court.