As expected, Vivendi Universal and USA Networks Inc. confirmed a deal Monday
that recombines the TV assets of USA (cable networks USA Network and Sci Fi
Channel, as well as TV-production and syndication units) and the film and music
assets of Vivendi (under the Universal Studios banner) that were split up three
years ago after The Seagram Co. Ltd. acquired Universal.
Under the new arrangement, USA and Vivendi will form a joint venture (Vivendi
Universal Entertainment) that will own USA's entertainment assets and the
Universal Studios assets.
Vivendi will pay approximately $11.7 billion to own 93 percent of the
venture, which will be headed by Barry Diller as chairman and CEO.
What's left of USA is being renamed USA Interactive, which will continue to
own and operate online businesses such as Ticketmaster, Citysearch and Hotel
Reservations Network. It will also continue to own Home Shopping Network.
Diller will continue to serve as chairman and CEO of USA Interactive, as
well.
USA will retain a 5.4 percent stake in the new venture and Diller gets 1.5
percent.
Vivendi gives up its 40 percent-plus stake in USA Interactive and, along with
it, the veto power it has exercised over transactions that USA has made to date
(for deals that exceeded 10 percent of USA's market
capitalization).
