OXFORD, United Kingdom-While it has become accepted that Vodafone will take control of Vizzavi, its Internet portal joint venture with Vivendi, the transaction will need careful handling to ensure Vodafone does not alienate the struggling French conglomerate if Vodafone is to amicably acquire the Vivendi-controlled Cegetel, which owns the French GSM operator SFR.
Vodafone has stated that it will continue to fund the Vizzavi operation, which is seen as a critical component in the cell-phone operator’s plans to launch a photo messaging service in Europe. Vivendi, as part of its attempt to drastically cut its US$10 billion debt, has admitted that it will no longer pour any more money into the venture. The two companies have invested more than US$1 billion into the joint venture since it was created in 2000, as a condition of securing Vivendi’s agreement to Vodafone’s takeover of Germany’s Mannesmann.
While J R Fourtou, Vivendi’s chairman and chief executive officer (CEO), denied in a letter to shareholders that there are any plans to sell its stake in Cegetel and that the company is even considering increasing its holding in Cegetel, many industry insiders believe a deal is being secretly negotiated. Vodafone is reported to be preparing a US$4.5 billion takeover of Cegetel, if it can persuade Vivendi to sell its 44-percent stake in the company.
Separately, Cegetel stated that it will reduce its 3G investment by 200 million euros (US$194.5 million) in 2002 and will now spend only 700 million euros (US$680.6 million) as opposed to the 900 million euros (US$875.1 million) initially planned.