Vivendi’s Strategic Restructuring: Unlocking Value Through Spin-offs
Vivendi SE, a prominent European media and entertainment conglomerate, embarked on a significant restructuring journey culminating in the spin-off of three key subsidiaries: Canal+, Havas, and Louis Hachette Group. This strategic move, finalized on December 18, 2024, aimed to address the persistent conglomerate discount that had plagued Vivendi’s valuation since the 2021 distribution and listing of Universal Music Group. The spin-offs marked a pivotal moment in Vivendi’s history, enabling each entity to operate independently, pursue growth opportunities, and optimize their respective capital structures.
The restructuring process, initiated in December 2023, involved meticulous planning and execution. Following approval from Vivendi’s Supervisory Board, the shares of the three subsidiaries began "If and When Delivered" trading on December 16, 2024, providing existing Vivendi shareholders with proportional stakes in the newly independent companies. Each Vivendi shareholder received one share of each spin-off company while retaining their original Vivendi share. This distribution mechanism ensured a seamless transition for investors, allowing them to participate in the potential upside of the separated entities.
The rationale behind the spin-offs stemmed from the belief that the conglomerate structure was hindering the individual growth potential of Canal+, Havas, and Louis Hachette Group. Despite exhibiting strong growth prospects in their respective sectors, these subsidiaries were burdened by the overall conglomerate discount applied to Vivendi’s valuation. By separating these businesses, Vivendi aimed to unlock their intrinsic value and provide them with the financial flexibility needed to capitalize on market opportunities. This strategic move also empowered each entity to tailor its capital allocation strategies, optimize debt levels, and pursue acquisitions and growth initiatives aligned with their specific market dynamics.
The financial implications of the spin-offs were carefully managed. While Louis Hachette Group emerged debt-free, Canal+ carried a net debt of approximately €400 million, primarily attributable to its investment in MultiChoice. Havas also started with virtually zero net debt. Vivendi retained a net debt of €1.9 billion after accounting for a loan granted to Lagardère earlier in the year. This distribution of debt aimed to ensure the financial stability of each entity post-spin-off, enabling them to operate effectively in their respective markets.
The choice of listing venues for the spin-off companies reflected a strategic approach to attracting long-term international investors. Canal+ listed on the London Stock Exchange, while Havas chose Euronext Amsterdam. Louis Hachette Group opted for Euronext Growth Paris. These selections were made based on each company’s business needs and geographic footprint, aiming to maximize investor interest and facilitate efficient trading. The diverse financial advisory team, which included prominent institutions like Goldman Sachs, HSBC, Natixis, Bank of America, Barclays, BNP Paribas, and others, underscored the complexity and significance of the transaction.
Prior to the spin-offs, Vivendi had undertaken another significant transaction involving the acquisition of the Lagardère group. This merger, approved by the European Commission in June 2023, required Vivendi to divest Editis and Gala magazine to address competition concerns. These divestitures were successfully completed by November 2023, paving the way for the subsequent spin-off transactions. The Lagardère acquisition and subsequent integration into the Louis Hachette Group underscored Vivendi’s strategic focus on consolidating its publishing and distribution businesses.
The spin-offs marked a transformational chapter for Vivendi and its subsidiaries. By separating these distinct businesses, Vivendi aimed to create a more streamlined and focused investment holding company while simultaneously empowering its former subsidiaries to pursue their own growth trajectories. Canal+, a leading European media company operating across television and online streaming, gained the autonomy to further expand its subscriber base and invest in new content offerings. Havas, a global advertising and communications firm, could now independently pursue its international growth strategy and tailor its services to a diverse client base. The Louis Hachette Group, comprising Lagardère and Prisma Media, gained the freedom to solidify its position in the publishing and distribution market. The successful execution of these complex transactions, with the assistance of a network of financial and legal advisors, positioned Vivendi and its newly independent subsidiaries for a future of growth and innovation.
