The transaction will leave Vivendi with a 93% stake in a new entity called Vivendi Universal Entertainment that merges the Universal Studios Group and the entertainment assets of USA. The Vivendi Universal operations include the studio's film, TV and theme park units.
The deal is expected to close in the first quarter, pending regulatory and shareholder approval.
New interactive unit
The remaining USA assets -- including Web sites such HSN.com, ticketmaster.com, Match.com and Hotel Reservations Network -- will belong to a new entity called USA Interactive.
Barry Diller, CEO of USA, will become chairman-CEO of Vivendi Universal Entertainment and will remain as chairman-CEO of USA Interactive.
USA Networks Inc. comprises of cable channels USA Network and Sci-Fi Channel, a TV production unit, Studios USA and boutique theatrical film unit USA Films.
Back in 1997 Seagram Co., then owner of Universal Studios, sold off part of its TV operations to USA Networks. As a result, Universal Studios, a division of Vivendi Universal, held an 43% equity interest in USA Networks.
Vivendi Universal's music holdings and its European broadcast giant, Canal Plus, will not be included in the venture.
Another deal on hold
Meanwhile, another related deal was put on hold. As a result of the USA-Vivendi transaction, the management of Expedia announced it has postponed a shareholder vote on an acquisition by USA scheduled for its annual shareholders' meeting today. In July, USA proposed to acquire the travel Web site in a stock deal.