Latest France-Italy clash is over voting rights for Mediaset’s merger plans

The latest move in a three-year-old war between French media giant Vivendi and Italian rival Mediaset is unfolding with the French company suing to make sure it can vote against Mediaset’s plan to transform itself into a pan-European power.

Vivendi owns 29 percent of Mediaset’s shares, the result of a 2016 deal that would have seen the two companies work together in a for-pay television deal.

But the deal fell through and since then Vivendi’s Vincent Bollore and former Italian Prime Minister Silvio Berlusconi, Mediaset’s largest shareholder, have been bitter rivals.

Mediaset’s plan would see the company link its Italian and Spanish operations along with a minority stake in a German broadcaster that would create a new continental power that could reshape the European media sector. The new company, Media for Europe, would have its legal headquarters in Amsterdam, the Netherlands, and its fiscal headquarters in Milan, Italy. Mediaset shareholders are set to vote on the measure on Sept. 4.

The proposal was first floated in June, and this month Vivendi formally declared its intentions to vote against it. But it is not clear how that would change things, since around two-thirds of the stake Vivendi holds in Mediaset is owned by what is called an arms-length trust, which cannot be used for voting rights under Italy’s 2004 Gasparri Law, which prevents foreign control of Italian media companies, and competition concerns created by Vivendi’s stake in former Italian state telecommunications monopoly Telecom Italia.

As a result, Vivendi has just under 10 percent of Mediaset’s voting shares, too little to block Mediaset’s plan. So now, Vivendi has petitioned a Milan court to ask that it to allow it to vote with all its shares.

“Vivendi is pulling out all the stops to try to block Mediaset’s plans,” Raffaele Barberio, director of Key4biz, a leading technology and digital communications portal, told Xinhua.

One problem, Barberio said, is that the court is not likely to rule on Vivendi’s petition in time for the Sept. 4 shareholder meeting. Another is that even if Vivendi could vote with all its 29-percent stake it would not be enough to block the deal on its own.

“There must be some factors behind all this that the public does not know about,” Barberio said. “But what is clear is that relations between Vivendi and Mediaset are turning into a battlefield and each side is doing what it can to undermine the other side.”

According to Innocenzo Genna, co-founder of Digit@lians, a network of professionals in digital fields, and a frequent commentator on digital issues, the confrontation between the two companies illustrates how quickly things can turn between modern corporations.

“These companies started out as potential partners with big ambitions and now they are aggressive rivals,” Genna said in an interview.

The clash is the latest in a long series of issues with France and Italy on different sides, ranging from political issues like each country’s policies on migration to the high-speed train link between Turin, Italy and Lyon, France, from whether or not an Italian company should have the right to operate a major French port to which country has the right to celebrate the 500th anniversary of the death of Renaissance maestro Leonardo Da Vinci.