10
Annual Report -
2013
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Vivendi
Group Profile
| Businesses | Litigation | Risk Factors
1
Strategy
1.3.
Strategy
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A priority: creating value for Vivendi
Shareholders
In June 2012, the Supervisory Board initiated an open-ended review
of the Group’s scope of activity, and undertook a strategic review of
all its assets, with the objective of creating more value for Vivendi’s
shareholders.
Several months of reflection and work have led Vivendi to conclude that
the potential to create optimal value for the Group requires:
in the short-term, flexible and pragmatic management of its
business units, aimed solely at reducing the Group’s debt and
restoring its financial flexibility; and
in the long-term, for Vivendi to refocus on its content and media
operations, which are likely to be more highly-valued in the digital
world of tomorrow.
Further, the implementation of the strategic review approved by the
Supervisory Board resulted, firstly, in the sale of two major assets:
on October 11, 2013, Vivendi completed the sale of the majority of its
interest in Activision Blizzard; and on November 4, 2013, the Group
signed a definitive agreement with United Arab Emirates telecom
operator Etisalat to sell the shares held by the Group in Maroc Telecom,
which is expected to be completed shortly. These two transactions
allowed Vivendi to restore its financial flexibility and reduce
its Net Debt.
Furthermore, the Supervisory Board set the foundation for a structural
transformation project with the announcement of its intention to carve
out SFR from the Group and to develop the future Vivendi into a dynamic
player in the growing digital media market.
On September 11, 2013, the Supervisory Board decided to launch
a study to split the Group into two separate companies and, on
November 26, 2013, it endorsed the principle of a spin-off.
On March 5, 2014, Vivendi received two binding offers for a controlling
stake in SFR: one offer from Altice, Numericable’s parent company, and
the other offer from the Bouygues Group.
On March 14, 2014, Vivendi entered into exclusive negotiations
with Altice for a period of three weeks. On April 4 and 5, Vivendi’s
Supervisory Board decided unanimously to select the Altice offer.
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Opportunities afforded by the Digital Revolution
Vivendi’s strategic repositioning is based on its belief that the digital
revolution will be a source of growth and value for content and media
businesses in both the medium-term and the long-term.
In a context where there is an increasing appetite for cultural and
entertainment products, this will offer Vivendi new opportunities
to expand access to content and multiply the opportunities to reap
the financial benefits. At present, the world is experiencing three
simultaneous digital revolutions:
a revolution in screens, marked by an ever-increasing quantity of
digital equipment and connected devices;
a revolution in uses, seen in the increasing consumption of content
on demand or the same content on several devices at the same time
(“second screen”); and
a revolution in platforms, the scale of which allows for virtually
unlimited and instantaneous distribution of cultural content,
services and products anywhere in the world.
Widely adopted by consumers, these giant digital “supermarkets”
provide new growth opportunities to Vivendi:
they strengthen the dominance of global content while fostering the
spread of local content;
they hold immense volumes of data, the use of which will allow
better targeting of clients, improved recommendations, valuations
and adaptation of offers to clients; and
they require strong content to distinguish themselves from one
another.
With the strength of its brands, the variety of talent and the quality
of its creations in music, television, film and series, Vivendi has a
significant competitive advantage over its competitors.
With this new digital advantage, the Group has an opportunity to
enhance its content portfolio and accelerate the development of new
business units (e.g., in music, endorsement allows artists to be lucrative
beyond mere record sales).
1.3.1.
Implementing Strategic Review
