Mediaset, the media empire controlled by former Italian prime minister Silvio Berlusconi, will merge its businesses into a pan-European powerhouse after fending off a shareholder revolt.
The broadcaster will combine its operations in Italy and Spain into a Dutch-listed holding company called Media for Europe as it looks to take on streaming rivals such as Netflix and Amazon.
The merger, which was approved by shareholders during an extraordinary general meeting today, comes despite a furious backlash from major investor Vivendi.
The French conglomerate had opposed the move, arguing it was designed to dilute the voting rights of smaller shareholders and shore up power for largest investor Fininvest, which is controlled by the Berlusconi family.
Vivendi, which is run by billionaire Vincent Bollore, has been locked in a dispute with Mediaset over its 29 per cent stake, which the Italian firm has argued is illegitimate.
Mediaset today blocked Vivendi from voting with the 19.1 per cent shareholding that is held in trust, meaning the investor’s voting rights were limited to just 9.9 per cent.
Vivendi slammed the decision to block two-thirds of its shareholding from the meeting as “unlawful”, and said it would challenge the new structure in court.
“Through its repeated unlawful decisions, Mediaset has created a detrimental situation of severe legal uncertainty for the company, ” Vivendi said in a statement.
“All Mediaset decisions will be carefully scrutinized. Vivendi will use every legal recourse at its disposal in all relevant jurisdictions to challenge the proposed Media For Europe structure, both under national and European laws.”
Vivendi could still block the merger if it decides to sell its stake, as the conditions mean Mediaset may not spend more than €180m (£163m) buying up shares of investors that choose to withdraw.
Vivendi has not commented on whether or not it will sell its stake, but it is understood a withdrawal could cost Mediaset €950m.
However, Mediaset chief executive Pier Silvio Berlusconi told reporters he was convinced Vivendi would not exercise its withdrawal rights.
Mediaset, which bought a 10 per cent stake in German broadcaster Prosieben, will be hoping the merger will enable it to join forces with other European companies to take on streaming services.
Main image credit: Getty