Page 348 - 2012 Annual Report

348 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
Note 23 Financial Commitments and Contingent Liabilities
Note 23. Financial Commitments and Contingent Liabilities
UNIVERSAL MUSIC GROUP
✱ 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 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.
✱ As of December 31, 2012, the guarantee given to Commonwealth
Atlantic Properties, assumed by Vivendi pursuant to the merger with
Seagram, covering rent payable by UMG and expiring on May 1, 2015,
had a residual value of $19 million.
✱ As of December 31, 2012, in addition to standard comfort letters,
Vivendi provided guarantees of an aggregate value of approximately
€5 million to several banks which granted credit facilities to certain
UMG subsidiaries to cover working capital requirements.
✱ Vivendi provided certain UMG companies in the Netherlands with
guarantees to cover their third party commitments.
✱ Vivendi provided financial guarantees of up to £11 million, which
expire on June 30, 2013, to the London Organizing Committee of the
Olympic Games and Paralympic Games Ltd. (Locog), to cover service
commitments on behalf of two British subsidiaries.
CANAL+ GROUP
✱ On August 30, 2006, the TPS/Canal+ Group merger was authorized, in
accordance with the merger control regulations, pursuant to a decision
of the French Minister of Economy, Finance and Industry, subject to
Vivendi and Canal+ Group complying with certain undertakings
for a maximum period of six years, with the exception of those
commitments concerning the availability of channels and VOD, which
cannot exceed five years.
On October 28, 2009, the French Competition Authority opened an
enquiry regarding the implementation of certain undertakings given by
Canal+ Group in connection with the merger of CanalSatellite and TPS.
On December 21, 2012, the French Council of State rejected Vivendi
and Canal+ Group’s filed motions requesting the annulment of the
French Competition Authority’s decisions of September 20, 2011 and
July 23, 2012. Under the first motion, the €30 million fine imposed on
Canal+ Group was reduced to €27 million. Under the second motion,
the transaction was cleared once again, subject to compliance with
33 injunctions. An independent trustee proposed by Canal+ Group
and approved by the French Competition Authority will be responsible
for monitoring the injunctions implementation. These injunctions are
imposed for a period of five years, renewable once. At the end of the
five-year period, the French Competition Authority will review the
competition situation in order to determine whether the injunctions
should be kept in place (please refer to Note 24, Litigation).
SFR
✱ As part of the takeover of Neuf Cegetel, the approval from the Ministry
of Economy, Industry and Employment, dated April 15, 2008, resulted
in additional commitments from Vivendi and SFR. They address
competitor access and new market entrants to wholesale markets on
SFR’s fixed and mobile networks, acceptance on the fixed network of
an independent television distributor if such a player appears, as well
as the availability, on a non-exclusive basis, of ADSL on eight new
channels which are leaders in their particular field (Paris Première,
Teva, Jimmy, Ciné Cinéma Famiz, three M6 Music channels and Fun
TV). Most of these commitments have expired, excluding those related
to pay-TV, which will expire in April 2013.
GVT
✱ Vivendi gave a financial guarantee for an amount of $31 million, which
expires on November 18, 2020, in connection with the liquidation of
Brazil Holdings, LLC in November 2010.