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Vivendi-Mediaset Legal Battle Heats Up as Both Sides File Suit

The ongoing legal battle between Italian broadcaster Mediaset and French media conglomerate Vivendi is heating up, with Vivendi going to court in Spain and the Netherlands against Mediaset’s plan to form a pan-European media company based in Amsterdam. 

For its part, Mediaset has announced several lawsuits against Vivendi’s video-sharing site Dailymotion, claiming more than €200 million ($220 million) in compensation for what it alleges is illegal use of its content.

Mediaset, which is controlled by the family of former Italian prime minister Silvio Berlusconi, has been waging a legal battle against Vivendi since a botched 2016 pay-TV deal. As their alliance went sour, Vivendi, owned by French billionaire Vincent Bollore, built up a 28.8% stake in Mediaset, becoming its second-biggest shareholder behind the Berlusconi family, which holds a 44% stake in the company through their holding company Fininvest.

But Mediaset has managed to have most of Vivendi’s voting rights frozen on antitrust grounds, because Vivendi also owns a large chunk of Telecom Italia. The legal dispute over this key point is ongoing.

In June, Mediaset announced plans to move its base to Amsterdam and to merge its separately listed Italian and Spanish units into a single pan-European company called MediaForEurope, or MFE. The combined company would operate in Italy, Spain and Germany, where Mediaset recently acquired a 9.6% stake in broadcaster ProSiebenSat1.

Under this plan, Mediaset would own about 35% of MFE and slightly more than 50% of voting rights. Vivendi would hold roughly 23%.

Mediaset has already obtained shareholder approval for the merger plan. But Vivendi opposes the move, calling it a pretext by the Berlusconi family to strengthen its grip on the company and not a sincere attempt to build a pan-European powerhouse to compete with the likes of Netflix.

Vivendi had until last Saturday to try to block the Mediaset merger plan by selling its stake at a loss. But the French conglomerate has decided instead to hold on to its stake and to step up the legal fight in countries where the antitrust concerns that hamper it in Italy would appear not to apply. (Mediaset argues that the voting freeze on Vivendi should also apply in the Netherlands.)

Late Monday, Mediaset said that Vivendi has taken legal action in Spain to void a Mediaset Espana shareholder meeting that recently approved the merger with Mediaset Italia to create MediaForEurope. Vivendi also filed suit in the Netherlands to annul the MFE bylaws giving Mediaset an absolute majority with a 35% stake.

“Even if the merger goes ahead and they [Mediaset] land in the Netherlands, there will be litigation going on and on and on,” Francois Godard of Enders Analysis said.

Godard said it was likely Mediaset would complete the merger, but that investors would continue to regard the company as at risk legally, “which could prevent them making further deals with other TV channels to consolidate as they say they want.”

As for Mediaset’s suit against Dailymotion, which is a YouTube rival, Mediaset said Monday that it had filed seven different lawsuits against the Vivendi-owned website. In one of these cases, which concerns 995 Mediaset videos, a Rome court in July ruled that Dailymotion must pay €5.5 million ($6 million) in damages, a ruling Vivendi has appealed. Based on the first round of that case, Mediaset claims that Vivendi would end up owing Mediaset more than €200 million in total.

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