Vivendi wants to be the life of the party. More than half of the company's business is in telecom services, and the rest is in movies, TV, games, and music. Its telecom holdings include SFR (Europe's largest alternative telecom operator) (more than 40% of sales), a controlling stake in Maroc Telecom (the largest telecom company in Morocco), and GVT in Brazil (that country's leading alternative high-speed Internet company). Vivendi's media assets include Universal Music Group (UMG) and the world's #1 independent video game publisher Activision Blizzard. Vivendi also owns CANAL+, the top pay-television provider in France, and Europe's largest distributor and producer of films.
Vivendi's telecom business provides mobile and fixed telecom services, including broadband Internet. At less than half of its main telecom company SFR's size is Canal+ Group, Vivendi's next largest business. Not much smaller than Canal+ is UMG, which gets most of its revenues from recorded music by artists such as Justin Bieber, Lady Gaga, LMFAO, and Rihanna. Activision Blizzard tops rival Electronic Arts, and in fact every other video game publisher except Nintendo, with game franchises such as Call of Duty (Activision) and World of Warcraft (Blizzard).
The company's revenue dropped from $38.3 billion in fiscal 2012 down to $30.4 billion in fiscal 2013. However, Vivendi's net income spiked from $216 million in fiscal 2012 up to $2.7 billion in fiscal 2013. Even with the increased net income the company's cash flow decreased by more than $2 billion in fiscal 2013 compared to the previous fiscal period.
Although Vivendi's strategy concentrates on synergies among its business units and organic innovation, acquisitions have also been important.
Mergers and Acquisitions
In 2012 Canal+ agreed to acquire the free-to-air channels and advertising sales operations from Bolloré. Vivendi announced in 2011 that it would expand UMG's music library by purchasing London-based music group EMI's recorded music division for £1.2 billion ($1.9 billion) from Citigroup. Already the global leader in recorded music with the largest catalog of musical works, the deal would bring UMG more big names, including Pink Floyd, Miles Davis, and arguably the biggest one in pop music ever, The Beatles.
Also that year Vivendi funded an even more significant acquisition by selling its 20% stake in NBCUniversal to NBCUniversal's majority owner General Electric for $5.8 billion. General Electric pushed for the acquisition to facilitate the proposed sale of a controlling 51% interest in NBCUniversal to Philadelphia-based cable operator Comcast. The deal gave Vivendi the funds it needed to take full ownership and total control of its SFR telecom division and thereby bolster its position at home against industry leader France Telecom (later renamed Orange) and other rivals. The company bought out UK-based Vodafone's stake (44%) in SFR for nearly $11.5 billion. SFR and Vodafone are set to extend their commercial partnership for three more years as part of the deal.