Page 327 - 2012 Annual Report

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VIVENDI l 2012 l Annual Report
FINANCIAL REPORT – CONSOLIDATED FINANCIAL STATEMENTS – STATUTORY AUDITORS’ REPORT ON THE
CONSOLIDATED FINANCIAL STATEMENTS – STATUTORY AUDITORS’ REPORT ON THE FINANCIAL STATEMENTS –
STATUTORY FINANCIAL STATEMENTS 4
4
IV - VIVENDI SA 2012 STATUTORY FINANCIAL STATEMENTS
3. NOTES TO THE 2012 STATUTORY FINANCIAL STATEMENTS
Major Events in 2012
3. NOTES TO THE 2012 STATUTORY FINANCIAL STATEMENTS
Preliminary Note: dollar amounts are expressed in US dollars.
Major Events in 2012
In 2012, the major transactions were as follows:
ACQUISITION BY VIVENDI AND UNIVERSAL MUSIC GROUP (UMG)
OF EMI RECORDED MUSIC
In accordance with the agreement entered into with Citigroup Inc. (Citi)
on November 11, 2011, and following receipt of the regulatory approvals
from the European Commission and the Federal Trade Commission in the
United States on September 21, 2012, Vivendi and UMG completed the
acquisition of 100% of the recorded music business of EMI Group Global
Limited (EMI Recorded Music) on September 28, 2012.
The purchase price, in enterprise value, amounted to £1,130 million
(approximately €1,4 billion) and included €1,363 million paid in cash
of which £991 million (approximately €1,230 million) was paid in early
September 2012, when conditions to payment were satisfied.
The approval by the European Commission was conditional upon the
divestment of EMI’s Parlophone label and certain other music assets
worldwide, such as EMI France, EMI’s classical music labels, Chrysalis,
Mute and several other local EMI entities.
On February 7, 2013, Vivendi and Universal Music Group entered into a
definitive agreement to sell Parlophone Label Group to Warner Music
Group for £487 million to be paid in cash (please refer to Note 23,
Financial Commitments).
ACQUISITION BY VIVENDI AND CANAL+ GROUP OF BOLLORÉ GROUP
CHANNELS
On December 2, 2011, Bolloré Group and Canal+ Group announced the
entry into a definitive agreement regarding the acquisition by Canal+
Group of Bolloré Group’s free-to-air channels, Direct 8 and Direct Star.
In February 2012, Canal+ Group exercised its option to acquire, in one
transaction, a 100% interest in Bolloré Group’s television business, in
exchange for the issuance of Vivendi shares.
On September 27, 2012, Vivendi completed a share capital increase of
22,356 thousand shares, which it paid in consideration for the contribution
made by Bolloré Media, representing an enterprise value of €336.4 million
(including €319.6 million in contributed shares and a €16.8 million price
adjustment related to debt and changes in working capital). On the same
day, Vivendi sold these contributed shares to its wholly-owned subsidiary,
Groupe Canal+ , and to certain of its subsidiaries (please refer to Note 7,
Long-term Investments, and Note 13, Equity).
Bolloré Group committed to retain the Vivendi shares received in
connection with the completion of this transaction for a minimum period of
six months after September 27, 2012. Since that date, Vivendi and Canal+
Group have been granted guarantees capped at €120 million. These
guaranties expire 3 months after the expiration of the applicable statute
of limitations for tax or social matters, and 18 months after September 27,
2012 for all other matters. Direct 8 and Direct Star were renamed D8 and
D17, in connection with their launch on October 7, 2012.
As part of the French Competition Authority’s approval of the transaction on
July 23, 2012, Vivendi and Canal+ Group undertook certain commitments.
These commitments are made for a 5-year period, renewable once if
the French Competition Authority, after having performed a competitive
analysis, deems it necessary.
Following the closing of this transaction, Bolloré Group reported
having increased its interest in Vivendi SA to 4.41%. Subsequently, on
October 16, 2012, it announced that it had crossed the 5% threshold in
Vivendi SA’s share capital.
COMPLAINT FROM LIBERTY MEDIA CORPORATION
On June 25, 2012, a verdict was returned by the jury against Vivendi in a
lawsuit filed by Liberty Media Corporation and certain of its subsidiaries
before the US District Court for the Southern District of New York. The
jury awarded damages to Liberty Media Corporation in the amount of
€765 million.
On January 9, 2013, the Court confirmed the jury’s verdict. It also awarded
pre-judgment interest accruing from December 16, 2001, using the average
rate of return on one-year US Treasury bills. On January 17, 2013, the Court
entered a final judgment in the total amount of €944.8 million, including
pre-judgment interest, but stayed its execution while it considered two
pending post-trial motions, which were denied on February 12, 2013. On
February 15, 2013, Vivendi filed with the Court a Notice of Appeal against
the judgment awarded, for which it believes it has strong arguments.
On the basis of the verdict rendered on June 25, 2012, and following the
entry of the final judgment by the Court, as of December 31, 2012, Vivendi
accrued a reserve in the amount of €944.8 million (Please refer to Note 4,
Net Exceptional Items, Note 15, Provisions and Note 24, Litigation).
NEW BORROWINGS AND CREDIT FACILITIES PUT IN PLACE /
REIMBURSED BY VIVENDI SA
Please refer to Note 16, Borrowings.