Vivendi Universal: In a Strategic Flux

VU, one of France's globally renowned companies, was involved in diversified businesses such as media, entertainment, Internet services, water treatment and telecommunications. The loss reported by the company was reportedly the biggest annual corporate loss posted in France's corporate history and surpassed the € 20.7 billion loss posted by France Telecom just a day before. Company observers opined that VU's problems were mainly caused by the spending spree of former CEO, Jean Marie Messier (Messier). Messier had dreamt of making VU one of the leading media companies in the world, but his business moves in that direction had failed and saddled the company in huge debts.

However, the company's 'unmindful' acquisitions almost led it towards bankruptcy by 2002. The company even faced investigations by French and US authorities, earning it the dubious distinction of being the European equivalent of the corporate scandal wave rocking the US since the late 1990s. Subsequently, in early 2002, Messier was asked to resign by the VU board. In June 2002 he offered his resignation. Analysts felt that Messier's departure from the company would mark the end of VU's quest to keep on expanding its sprawling music, film, telecoms, internet and pay TV empire. As the company began putting in place initiatives to set things right, the story of its diversification troubles and financial problems began to be frequently talked of in the global media.