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SFR to be spun off from Vivendi

The board of Vivendi has given the green light to a plan to demerge France's second place mobile operator as it focuses more on media and content.
Written by Anne Morris, Contributor

SFR looks set to be spun off from parent group Vivendi, after the company's supervisory board unanimously backed a plan to demerge the French telco from the group's remaining media and content assets.

In a statement, Vivendi said the demerger plan would offer the French operator "greater strategic autonomy to seize opportunities in a transforming market, reflecting the growing number of services and high-speed broadband access in an environment with a huge increase in usage".

The Paris-based group said that the plan will now be submitted to the relevant works councils and regulatory authorities, and said the details will be presented at a later stage. The group said it aims to include it on the agenda of the next annual shareholders' meeting at the end of June 2014.

SFR competes in France's fixed and mobile market with Orange, Bouygues Telecom and Iliad-owned Free and has been engaged in a fierce mobile price war since the launch of low-cost tariffs by Free Mobile in January 2012.

Like its rivals, SFR is pinning its hopes on the launch of new LTE and fibre broadband services across France, as well as its strategy of bundling together fixed and mobile services into single plans, such as the SFR Multi Packs.

Vivendi has long pursued the strategy of ridding itself of its more problematic telecoms assets and focusing solely on its media and content businesses, and SFR is set to be the latest unit to come under the spotlight. Vivendi has already agreed the sale of its 53 percent stake in Maroc Telecom to Etisalat for €4.2bn ($5.65bn) and has also announced the sale of its controlling stake in video games maker Activision Blizzard.

As well as agreeing to the demerger plan, the Vivendi supervisory board also confirmed Vincent Bolloré as its new chairman, replacing Jean-Rene Fourtou. Until the completion of the demerger plan, Vivendi's management board, chaired by Jean-François Dubos, will be composed of Jean-Yves Charlier, chairman and CEO of SFR, and Arnaud de Puyfontaine.

Bolloré would thus preside over the new media and content-focused Vivendi consisting of the French pay-TV group Canal+, which also operates in French-speaking Africa, Poland and Vietnam and owns the subsidiary StudioCanal; Universal Music Group; and Brazilian telecoms and media group GVT.

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