Case Scenario 3: Vivendi

Case Scenario 3: Vivendi
Vivendi Universal is a French firm that started in 1853 as Companie General des Eaux. It grew from a French water utility company into one of the world's largest conglomerates. Under the corporate leadership of then CEO Jean-Marie Messier, Vivendi Universal became a highly diversified company involved in music, publishing, film, pay TV, telecoms, Internet, water distribution, thermal energy supply, building and heavy public construction projects, waste management, electrical energy services, real estate and other activities. The company's rapid expansion in the late 1990s and early 2000 brought about financial and legal trouble resulting in the replacement of chairman and CEO Jean-Marie Messier who had been responsible for much of the expansion. Mr. Messier was forced out of the company in July, 2002, in a liquidity crisis and mounting shareholder anger. The acquisitions made by Mr. Messier saddled the company with billions of dollars of debts. Vivendi shares plummeted 80 percent during the last six months Mr. Messier was CEO, according to the Wall Street Journal. Meanwhile, the SEC indicated that a disputed severance payment of $23 million to Mr. Messier may actually constitute "ill gotten gains," reported the Wall Street Journal. In 2003, Vivendi had a corporate loss of €23.3 billion. On the brink of bankruptcy, Vivendi Universal brought in Jean-Rene Fourtou to replace Mr. Messier as CEO. According to the business media, Mr. Fourtou has taken a dying enterprise and given it a survival plan. He sold numerous Vivendi Universal businesses, bringing the company to focus on Cegetel, a phone company; SFR, a cell phone company; Canal Plus, a television company; and Universal Music. Mr. Fourtou was able to reduce Vivendi's debt from 37 billion euros in 2002 to a projected 5 billion euros by the end of 2005. The company showed its first quarterly profit at the end of 2003, allowing Mr. Fourtou to arrange a loan from a banking consortium and give the company hopes that credit-rating agencies would raise its debt from junk-bond status, according to The New York Times. Today (2011), Vivendi is a world leader in video games (Activision Blizzard), music (Universal Music Group), the French leader in alternative telecoms (SFR), the Moroccan leader in telecoms (Maroc Telecom Group), the leading alternative telecoms provider in Brazil (GVT) and the French leader in pay TY (Canal+ Group). Vivendi also owns 100% of zaOza (a subscription-based community legal sharing site), 93% of Digitick (the French leader in e-tickets), and 99.5% of Wengo (the French leader in telephone-based expert assistance). According to Vivendi's web site, the company puts innovation at the core of its strategy. It seeks to continuously launch innovative products and services combined with its diversification strategy. To enhance its innovation focus, in October 2010 Vivendi formed an Innovation Division with the purpose of increasing internal innovations and identifying new growth sectors. The company's annual report (December 31, 2010) shows an adjusted net income of €2,698 million. The current CEO is Jean-Bernard Levy and the Chairman is Jean-Rene Fourtou.Case Scenario 3: Vivendi
Vivendi Universal is a French firm that started in 1853 as Companie General des Eaux. It grew from a French water utility company into one of the world's largest conglomerates. Under the corporate leadership of then CEO Jean-Marie Messier, Vivendi Universal became a highly diversified company involved in music, publishing, film, pay TV, telecoms, Internet, water distribution, thermal energy supply, building and heavy public construction projects, waste management, electrical energy services, real estate and other activities. The company's rapid expansion in the late 1990s and early 2000 brought about financial and legal trouble resulting in the replacement of chairman and CEO Jean-Marie Messier who had been responsible for much of the expansion. Mr. Messier was forced out of the company in July, 2002, in a liquidity crisis and mounting shareholder anger. The acquisitions made by Mr. Messier saddled the company with billions of dollars of debts. Vivendi shares plummeted 80 percent during the last six months Mr. Messier was CEO, according to the Wall Street Journal. Meanwhile, the SEC indicated that a disputed severance payment of $23 million to Mr. Messier may actually constitute "ill gotten gains," reported the Wall Street Journal. In 2003, Vivendi had a corporate loss of €23.3 billion. On the brink of bankruptcy, Vivendi Universal brought in Jean-Rene Fourtou to replace Mr. Messier as CEO. According to the business media, Mr. Fourtou has taken a dying enterprise and given it a survival plan. He sold numerous Vivendi Universal businesses, bringing the company to focus on Cegetel, a phone company; SFR, a cell phone company; Canal Plus, a television company; and Universal Music. Mr. Fourtou was able to reduce Vivendi's debt from 37 billion euros in 2002 to a projected 5 billion euros by the end of 2005. The company showed its first quarterly profit at the end of 2003, allowing Mr. Fourtou to arrange a loan from a banking consortium and give the company hopes that credit-rating agencies would raise its debt from junk-bond status, according to The New York Times. Today (2011), Vivendi is a world leader in video games (Activision Blizzard), music (Universal Music Group), the French leader in alternative telecoms (SFR), the Moroccan leader in telecoms (Maroc Telecom Group), the leading alternative telecoms provider in Brazil (GVT) and the French leader in pay TY (Canal+ Group). Vivendi also owns 100% of zaOza (a subscription-based community legal sharing site), 93% of Digitick (the French leader in e-tickets), and 99.5% of Wengo (the French leader in telephone-based expert assistance). According to Vivendi's web site, the company puts innovation at the core of its strategy. It seeks to continuously launch innovative products and services combined with its diversification strategy. To enhance its innovation focus, in October 2010 Vivendi formed an Innovation Division with the purpose of increasing internal innovations and identifying new growth sectors. The company's annual report (December 31, 2010) shows an adjusted net income of €2,698 million. The current CEO is Jean-Bernard Levy and the Chairman is Jean-Rene Fourtou.
-(Refer to Case Scenario 3) The stakeholder group most affected by Vivendi's rapid decline of its stock value were product market stakeholders.