American investors: Vivendi Universal wants you.

• Author: Heffes, Ellen M.
• Position: CFO Interview - Guillaume Hannezo

Paris-headquartered Vivendi Universal SA has grown tremendously in recent years from its historic base in the water business. It's now a huge media concern -- and claims to be the only truly global media company. In April, it began reporting in U.S. generally accepted accounting principles (GAAP) as well as French GAAP, hoping to gain recognition and additional U.S. shareholders. (Vivendi Universal and an environmental unit are both listed on the New York Stock Exchange as American Depositary Receipts, or ADRs.)

Financial Executive spoke with Guillaume Hannezo, Vivendi's 41-year old senior executive vice president and chief financial officer, about the company's strategies and its accounting practices.

Let's begin with an overview of what's been happening at Vivendi Universal over the last three years relating to direction and strategy.

GH To shorten the story of this company, stemming from the original Vivendi, it's quite simple: It used to be a utility company that developed quite a good knowledge and understanding of privatization and deregulation around the world. Benefiting from the telecom deregulation and the opening of the French telecom market to competition in the middle of the 1990s, it created a telecom operation, which at some point, was worth more than the original utility business.

At this point, there were choices made to [move] into the media business. There were three possible directions we could have taken: One would have been to dispose of the telecommunication and communication business; the second, to consolidate in telecom. And [third] the strategy that Chairman and CEO (since 1996) Jean-Marie Messier chose, out of his own vision, was anticipating the so-called convergence between content and access.

[Thus] we moved from having internally developed, out of nothing, this huge telecom operation in France, into restructuring an old media conglomerate, which was called Havas, and combining the synergies of the two companies that we merged with in 2000, Canal Plus and Seagram Co.

Today, we are making the final decisions to move this business to a pure play on communications. Once complete, this company has quite interesting characteristics. Like AOL Time Warner Inc., it's primarily a content company, trying to integrate content with some access businesses -- with pay-TV and mobile telephony, what we believe are the two most promising access businesses for the media business.

Second, among the media conglomerates, Vivendi Universal is probably the most global; with businesses and managers in locations around the globe, we have built something that is well-spread between Europeans and Americans. This is not a European company that has grown a U.S. operation, [nor] a U.S. company with overseas operations. It's probably the first to be truly global, which, in our content businesses...