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Vivendi Communications becomes world player in multimedia following acquisition of US company Cendant Software by Havas.

NEW YORK--(BUSINESS WIRE)--Nov. 20, 1998--Vivendi Communications(a) expansion priorities center on high growth services at the heart of convergences with content: mobility and the Internet in telecommunications, and educational and trade publishing as well as multimedia in media activities.

Vivendi Communications has taken a major step forward in its growth strategy through Havas's acquisition of US company Cendant Software, the joint world leader in electronic publishing with estimated 1998 net sales of over $600m.

Cendant Software develops and distributes interactive products on CD-ROM, DVD-ROM and the Internet mainly in the areas of education, games and lifestyle. The company holds leading positions in all its domains. It ranks second globally in educational software (net sales: $259m), number one in games (net sales: $182m) and number three in lifestyle software (net sales: $72m). All three markets are expected to experience very strong growth in the USA and Europe. Annual growth of 15% is forecasted for the period 1998-2002 in the USA and 25% in Europe for the same period.

Cendant Software develops products that are well known throughout the world, with the well-known brand names of Adibou, Blizzard, Knowledge Adventure and Sierra. The company currently generates 80% of its net sales in the USA, and publishes its products in 20 languages. It holds 40% of the French market for educational CD-ROMs and 25% of the German market.

The acquisition of Cendant Software is a unique opportunity for Havas to become the world leader in electronic publishing, a market that is experiencing strong growth. It also considerably accelerates the internationalization of the company's operations in the USA. Major possibilities for developing synergy exist between the educational and reference work activities of Havas (represented by Larousse, Bordas and Nathan), America On Line, Spanish publishing company Anaya, and the Canal Plus pay television channel. Havas is to acquire 100% of Cendant Software for the basic price of $800m and a maximum upside potential of $185m.

In addition, after consultation with the appropriate labour organizations, Havas is envisioning the sale of its billboard advertising activities. Havas will then be focused on its two core activities of publishing and multimedia.

The acquisition of Cendant Software will increase Vivendi's earnings per share before goodwill by 0.8% in 1999 and 1.6% in 2000. The slight decrease after goodwill will be more than compensated for by the capital gain from the sale of the billboard activities. The operation as a whole will increase Havas's contribution to Vivendi's net income for the period 1999-2000.

1998: a year of growth for Vivendi

Following the sale of non-strategic assets worth FF80 billion, 1998 will have been a year of external growth for Vivendi with major international acquisitions carried out in its two priority areas of utilities and communications.

In utilities, the main developments have been the alliance with Spanish company FCC to accelerate expansion in Spain and Latin America, and the acquisition of power plants from BECO and GPU by Sithe Energies, which has become the leading independent power producer in the northeast of the USA.

In communications, 1998 developments include the takeover of AOL France by Canal Plus in January and the merger with Havas last May. Havas then rapidly moved into a growth phase focused on its core activities, through the acquisition of Doyma and Anaya in Spain, the takeover of the L'Etudiant and Quotidien du Mdecin reviews in France, and now the acquisition of Cendant Software in the USA.

These actions have confirmed Vivendi's strategy of strong growth in stable economies, where 95% of its net sales are generated. This coherent series of operations has enabled the company to acquire leading positions in the activities involved. Taking into account the decisions made concerning assets and the partnership agreements concluded, the net investment required by Vivendi for the FCC, GPU and Cendant transactions is limited to between FF5 and FF10 billion.
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Publication:Business Wire
Geographic Code:1USA
Date:Nov 20, 1998
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