Vivendi chief Lévy resigns, fueling speculation of a company breakup

SFR gets a new CEO as Combes bows out
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Vivendi CEO Jean-Bernard Lévy unexpectedly resigned Thursday amid a disagreement with the board about the strategic direction of the company.

Lévy

The move, which could lead to Vivendi disposing of various assets, has forced the company to hurriedly promote Stéphane Roussel, currently the head of human resources at Vivendi, to become the CEO of operator SFR. Lévy had been the operator's temporary CEO, having forced SFR's previous CEO Franck Esser to resign in late March.

As the shakeup became public, it became apparent that Vodafone's European head, Michel Combes, who had been appointed to become CEO of SFR as of Aug. 1, will now not be joining the company. Combes is still employed by Vodafone, but his future with the UK-based operator is now unclear given Vodafone itself has just announced a management restructure to its European operations.

According to a Bloomberg report, which cited unnamed sources, Combes had hoped to have the chance of moving to become CEO of Vivendi. However, that plan was squashed by Jean-Rene Fourtou, the chairman of Vivendi, the report said.

Will Draper, an analyst at Espirito Santo in London, told Bloomberg. "The SFR role is utterly critical to Vivendi. The stage was set for Combes to pick up SFR at a low, clear the decks, and preside over its improvement."

"Jean-Bernard Lévy's departure clearly makes the divestiture scenario more probable," Gilles Guibout, a fund manager at AXA Investment Management in Paris told Reuters. "The question is whether he couldn't have taken tougher steps earlier."

According to Reuters, financial sources said last month that bankers were working on proposals that included the sale of individual business units, such as Maroc Telecom worth €5.4 billion, as well as dividing the company with telecoms on one side and media on the other.

The French newspaper Les Echos has speculated that Lévy's plan to focus Vivendi around telecoms based upon SFR, Maroc Telecom and GVT will not now happen--which could be the reason behind the rapid about-face executed by Combes--and that Vivendi now might even put SFR up for sale.

Commenting on the appointment of Roussel as SFR CEO, La Tribune reported that he well understood the company and the plan to implement cost reductions, which could involve around 1,000 job cuts.

For more:
- see this release
- see this Reuters article
- see this Les Echos article (translated via Google Translate)
- see this La Tribune article (translated via Google Translate)
- see this Bloomberg article

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