PARIS — Vivendi, the French company now in parleys to become the newest owner of a major Hollywood studio, got its start nearly a century and a half ago in an improbably different line of work: slaking Parisians' thirst for drinking water.
But in the last four years, under a brilliant and hard-driving chairman, Jean-Marie Messier, the staid and sleepy utility of yesteryear has morphed into a European powerhouse in communications, multimedia and the Internet.
Vivendi now owns a 49% share of Canal Plus, Europe's largest pay-television company, with nearly 15 million subscribers in France, Spain, Italy, the Benelux countries, Scandinavia and the French-speaking nations of Africa. It owns the second-largest telephone company in France and the country's largest publisher and Internet service provider.
"Compared to the American telecommunications companies, we are midgets," Messier has often reminded co-workers, one Vivendi executive reported Wednesday. "So we have to be quicker and more imaginative."
Nicknamed "Master of the World," in grudging admiration for his grandiose and often fulfilled plans, the 43-year-old Messier has dreamed out loud of becoming the Gallic equivalent of CNN founder Ted Turner. Now the native of Grenoble in the French Alps and the conglomerate he controls are poised to acquire Seagram Co., parent of Universal Studios, one of Hollywood's venerable dream factories.
Analysts said the deal makes superb sense for Vivendi--and is completely in keeping with Messier's grand ambitions.
"From Vivendi's view, it's consistent with the desire of global companies to expand their influence to the United States," said Barry Hyman, an analyst at Ehrenkrantz King Nussbaum in New York. "What you get in Seagram is a burgeoning global music division and an underappreciated film division."
For Vivendi, that means a lot more content to peddle over its various media outlets, including Canal Plus and the Internet. Like the AOL-Time Warner merger announced Jan. 10, Hyman said, a Vivendi-Seagram marriage would mean "consolidation of distribution and contents under one roof."
Two months ago, Canal Plus founded its own movie production company, StudioCanal. But acquiring Universal would bring to the mix a well-established, if somewhat faded, Hollywood institution, one responsible, among other productions, for Steven Spielberg's "Jurassic Park" and "Schindler's List." It would be the realization of Canal Plus chief Pierre Lescure's longtime dream: to build "a major European studio of world dimensions."
Ironically, it is the French in Western Europe who rail the loudest about the invasion of the Continent's movie and TV screens by films and programming made in the United States. And now, analysts said, the entertainment assets of Seagram are all Vivendi really wants. If the deal is concluded, they predicted, the Montreal-based company's liquor brands will be quickly sold off.
As it prepares to launch a new type of multi-access Internet portal, Vizzavi, due to begin service in France on Monday, Vivendi is also short on musical content to attract and keep customers. Purchasing Seagram would bring recordings by top-selling Eminem, Limp Bizkit, Dr. Dre and the other artists signed to Universal Music, Europe's No. 1 music company.
"The logic of all this is simple," said Olivier Moral, a financial analyst with Handelsbanken Markets in Paris. "Seagram in media owns an important catalog of movies, plus a catalog of music. As far as music is concerned, the audio content was what was lacking for Canal Plus and Vivendi's future portal, Vizzavi."
That new gateway is designed to allow access to the Internet from home computers--but also from cellular telephones and television.
"You might have a phone that will let you watch a movie, or get your e-mail on your TV," Vivendi spokesman Antoine Lefort said. Vivendi estimates the potential market at 70 million Europeans, encompassing subscribers to Canal Plus, Vivendi's cellular customers and those of British-based Vodafone AirTouch, with which Messier concluded a strategic alliance in January.
Poised and coolly confident, with innocent, boyish looks that one writer from the Agence France-Presse news agency likened to those of a youngster about to receive communion, Messier is a member of a singular French breed: a highly educated civil servant who, like Renault Chairman Louis Schweitzer, has flourished in the rough-and-tumble world of international capitalism.
"When our chairman took the lead, we were basically an environmental services company," one Vivendi official said Wednesday, speaking on condition of anonymity. "He was the first in France to see the importance of the convergence strategy [in multimedia, information technology and the Internet]."
Under the impetus of Messier, the Vivendi official said, "we decided to operate AOL France. We bought Havas, the top publisher in France. We bought software companies in the United States, including Sierra and Blizzard."
