Vivendi and Mediaset have unveiled a strategic partnership that aims to shake up the TV and video markets in Italy, Spain and France.

The deal sees Vivendi swap 3.5 percent of its share capital for 3.5 percent of Mediaset’s share capital and 100 percent of Mediaset’s Premium pay-TV business.

The two companies said they planned to establish a new content creation business and the first pan-European on-demand streaming platform.

Vivendi, which is Telecom Italia’s (TIM) major shareholder, sees its subscriber base grow to over 13 million as a result of acquiring Mediaset Premium.

The France-based company said the deal represented “a major step forward” in its ambition to become “a large international media and content group with a European essence”.

It already owns Canal+, the leading pay-TV operator in France, which includes film production business Studiocanal.

It also owns Universal Music Group and Dailymotion, the YouTube wannabe that it acquired from Orange last year.

Italy-based Mediaset owns TV production company Taodue and film distribution business Medusa Film.

The deal will impact telcos across Southern Europe, notably TIM, Telefónica – which acquired Canal+ in Spain last year – and Orange.

CCS Insight Analyst Paolo Pescatore commented: “The deal between Vivendi and Mediaset is a potential game changer.

“The tie-up between both companies heralds a new era in content acquisition, commissioning and distribution in Southern Europe, with the opportunity to expand into other European markets.

“Vivendi is therefore now positioning itself as a content powerhouse in Europe.

“Sky’s move to consolidate its position in Europe has arguably triggered this move as the media industry continues to see a wave of corporate activity.

“Similarly, pay-TV providers have come under significant competitive pressure with the arrival of OTT providers like Netflix and telcos adding TV/video services as part of a multiplay offer.

“This move will no doubt spark more consolidation not only in media, but among telcos as the European market driven by convergence moves towards a handful of key players who own assets in connectivity and content.”

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