Canal Plus concludes CanalSat – TPS merger
by Fabien Lemercier
Negotiations will conclude today between Canal Plus and the Lagardère group over the merger (see article) that will bring together the giants of French satellite television, CanalSat (with approximately 3.2m subscribers) and TPS (1.7m). The Lagardère group will swap 34% of CanalSat against 20% of the new company, Groupe Canal Plus (which also takes in the 5m current subscribers of the encrypted channel), joining TF1 and M6 who will hold, respectively, 15% and 5% of the new company, valued at €7.5bn. The move will cost Lagardère between €500–550m, with an option to increase its share to 34% within the next three years. However, control of the new outfit will remain entirely in the hands of Canal Plus (a subsidiary of Vivendi Universal), the big winner in the battle for satellite viewers, which will become the only subscriber satellite service, just like BSkyB (UK), Sky Italia (Italy), Digital Plus (Spain) and Premiere (Germany). Now head of the largest French audiovisual group, Canal Plus CEO Bertrand Meheut took the opportunity to congratulate the company on its success, emphasizing that it is essential to concentrate on "major sporting events and the best of world cinema".
Now that the merger has been tied up, it will be examined by the French and European competition authorities, and the Group will begin a rationalisation programme to avoid duplication between TPS and CanalSat. All this is being followed with great interest by French film professionals because of the critical role Canal Plus plays in financing domestic cinema. In 2004, the company invested €136.6m in 124 French features, which, along with €9.4m from Ciné Cinéma (CanalSat) and €31.8m from TPS Cinéma, provided €177.8m of the €819.7m invested in French film production that year: manna that French cinema hopes will not be reduced as a consequence of this merger.
(Translated from French)