Vivendi’s Legal Win Clears Path for Split, But Can Its Strategic Shifts Deliver Value?

Vivendi’s recent legal victory in overturning the French market regulator’s rejection of its corporate split has breathed new life into its ambitious reorganization plan. The Paris Court of Appeal’s decision to annul the AMF’s ruling on April 22, 2025, removes a major hurdle for the media giant, which now moves forward with its plan to separate its businesses into four distinct entities. But as investors assess the implications, questions linger about whether the strategic shifts—including a major stake sale in TIM—will translate into sustainable value.

The Legal Battle and Shareholder Backing

The split, approved by 97.5% of shareholders in December 2024, had been blocked by the AMF, which argued the move diluted minority shareholders. The court’s reversal now paves the way for Vivendi to proceed, though the final details will be debated at its April 28 shareholder meeting. Notably, even excluding the Bolloré family’s controlling influence, the split garnered 95.7% approval, with a recalculated quorum of 40.91%. This level of support suggests broad shareholder confidence in Vivendi’s strategy, a critical signal for investors.

The stock’s recent rebound—up 18% since the court’s decision, compared to a 6% rise in the CAC 40—hints at market optimism. But the real test comes next: whether the split will unlock value through operational focus.

Strategic Shifts: TIM Sale and Portfolio Focus

Vivendi’s sale of 15% of TIM to Poste Italiane, reducing its stake to 2.51%, marks a significant pivot. By exiting telecom, Vivendi aims to concentrate on its core media and entertainment assets, including Universal Music Group (UMG), Gameloft, and Banijay. This move aligns with its stated goal of leveraging digital transformation and content-driven growth.

The TIM stake, once a key part of its portfolio, now represents a smaller piece of the puzzle. Investors will watch whether the proceeds from the sale—estimated at €1.2 billion—are reinvested into high-growth areas like streaming or gaming.

Risks and Uncertainties

While the legal win is a positive step, Vivendi’s path is far from smooth. The AMF could still appeal the court’s decision, prolonging regulatory uncertainty. Additionally, the success of the split hinges on the performance of its four entities, which include UMG, Gameloft, Banijay, and a new media services division.

The company’s focus on ESG (environmental, social, and governance) principles, rooted in its 2003 CSR commitment, may attract socially conscious investors. However, execution risks remain: UMG faces headwinds from streaming competition, while Gameloft’s gaming business is cyclical.

Conclusion: A Gamble on Focus and Digital Growth

Vivendi’s strategy is a high-stakes bet on specialization. By shedding non-core assets and sharpening its focus on media and entertainment, the company aims to capitalize on trends like streaming growth and AI-driven content creation. The court’s decision removes a critical obstacle, but investors must now assess whether the split’s operational benefits outweigh the execution risks.

Crucial data points include:
- Shareholder approval: 95.7% support even without Bolloré’s influence signals broad alignment.
- Financial flexibility: The TIM sale provides €1.2 billion in liquidity, which could fund strategic acquisitions or dividends.
- Market performance: If UMG and Gameloft deliver top-line growth, Vivendi’s stock could outperform peers.

Yet risks loom large. Regulatory appeals, competitive pressures in digital markets, and the complexity of managing four entities could derail progress. For now, the legal win and shareholder support suggest Vivendi is moving in the right direction—but investors should keep one eye on the court and the other on cash flows.

In the end, Vivendi’s success will depend on whether its reorganization unlocks the value it claims lies dormant in its portfolio. The next few quarters will be decisive.