Vivendi to shut down Europe

21 Jul 2003

Struggling media titan Vivendi’s Universal Net division is understood to have taken the decision to close down Europe.

According to a leaked memo, the music distribution website based in London will cease trading on 8 August. It is understood that the decision to close the company came as a result of an accelerated restructuring schedule within Vivendi Universal Net.

Vivendi is struggling with a crippling debt taken on in a bid by former CEO Jean-Marie Messier to transform a sleepy French utility into a modern media titan, straddling the Internet, television, music and publishing.

In 2002, the company recorded a net loss of about US$26bn (€23.3bn) on sales of close to US$32bn. The company said it hopes to become profitable in 2003.

Since its launch two years ago, Europe established itself as one of the leading online destinations for music in Europe. A favourite of music fans and emerging artists alike, features streaming and downloading music from more than 250,000 artists and 750,000 songs.

Vivendi acquired in 2001 for US$372m and it is understood that Vivendi is planning to sell the American division of as well. According to sources, analysts don’t believe that Vivendi will regain even a percentage of the original buying price.

By John Kennedy