French Regulator OKs Canal Plus Acquisition of Two TV Channels

By Sam Schechner and Marion Issard

PARIS-- France's TV regulator approved Tuesday the purchase of two TV channels belonging to the Bollore (BOL.FR) conglomerate by French pay-TV giant Canal Plus, clearing the way for a deal that will make Bollore one of the biggest individual shareholders of Canal Plus parent Vivendi S.A. (VIV.FR).

"We authorize Canal Plus to buy Direct 8 and Direct Star, with conditions," a spokesman for the French regulator, known as CSA, said via telephone. An announcement spelling out conditions is expected later Tuesday.

The approval clears the second hurdle for the two free-to-air TV channels to become part of Canal Plus, in a deal first announced last fall. France's competition authority also approved that deal over the summer, along with conditions aimed at limiting Canal Plus's power over the French TV marketplace.

As part of the purchase, Bollore, run by industrialist Vincent Bollore, will be paid in Vivendi stock, bringing it up to roughly 5% of the company's outstanding shares. Vivendi's chairman Jean-Rene Fourtou has said that it intends to invite Mr. Bollore to join Vivendi's board, and a person familiar with the matter said in June that Mr. Bollore intends to accept.

The two men have been friends since the 1980s, when they were both part of an exclusive club of French industrial leaders.

For Canal Plus, the purchase pushes the company into the increasingly competitive free-TV marketplace in France. Competitors have seen the advertising market, already weak because of the sputtering economy, split between a growing number of channels in recent years, with another set of digital terrestrial channels set to launch soon.

-Write to Same Schechner at [e-mail]

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