Vivendi seals $34bn Seagram deal to rival AOL

French conglomerate Vivendi has finalised its $34bn deal to buy Seagram, the owner of Polygram Records and Universal Studios, and confirmed its place as AOL's biggest rival.

The deal to create Vivendi Universal marks the next step in Vivendi's plans to become a new media content provider following the recent creation of its own portal Vizzavi. The portal is a joint venture between Vivendi's CanalPlus and Vodafone, offering global and local news, information and services.

Jean-Marie Messier, CEO at Vivendi, said the deal will merge the company's wireless and fixed networks, ISPs, and satellite networks with content from one of the largest music companies and film library as well as consumer and PC-based software games.

Vivendi is expected to hold a 56 per cent stake in the new company while Seagram will take 29 per cent, with the remaining 12 per cent going to CanalPlus shareholders. Vivendi Universal will be divided into four groups - pay TV and film production, music, publishing, and telecommunications - with Edgar Bronfman, current CEO at Seagram, heading up Vivendi Universal's music and internet business.

However, Messier said he would be selling Seagram's drinks business to pay off the company's $7bn debt.

The new company will be headquartered in Paris and listed on the Paris, New York and Toronto stock exchanges.