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Bloomberg
Vivendi SA’s Canal+ agreed to buy pay-TV operator M7 Group for just over 1 billion euros ($1.2 billion) to expand in Europe, where it’s vying for subscribers with Netflix Inc.
The purchase of M7 from private equity firm Astorg Partners SAS pushes Canal+ into seven European countries, bringing its total subscribers to almost 20 million, Paris-based Vivendi said in a statement late. M7, with 3 million subscribers, operates a largely direct-to-home satellite business in central and eastern Europe, the Netherlands and Belgium.
The fast growth of Netflix in France has forced the once-dominant Canal+ to review its subscription offerings and
introduce new products. Canal+, Vivendi’s biggest unit after Universal Music Group, also saw its sports proposition hit by Spain’s Mediapro, which won the broadcast rights for France’s Ligue 1 soccer games for the season starting next year.
While Vivendi said the M7 deal will help extend distribution for Canal+ content, analysts at Citigroup Inc. cast doubt on the rationale of acquiring the satellite business given the consumer shift toward on-demand streaming, and said in a research note that it’s a distraction for investors focused primarily on Vivendi’s attempt to sell a stake in its Universal Music Group business.