The Rise and Fall of Vivendi Universal's Jean Marie Messier
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Case Details:
Case Code : LDEN015
Case Length : 11 Pages
Period : 1996-2002
Pub Date : 2003
Teaching Note :Not Available
Organization : Vivendi Universal
Industry : Media and Entertainment Countries : France
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts
The Dealmaker
At the time of his joining CGE, analysts regarded
Messier as a young, dynamic and forward-looking leader, who could
pull the company out of its problems...
The Other Side of the Coin
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Not everyone approved of Messier's approach towards business.
A Paris stock market analyst commented, "Messier may have unloaded a lot of
excess business, but he's still got a ways to go. The strategy with the water
business is to reinvest part of the expected profit into the communications
side.
At some point, however, you have to wonder if it's a good idea to be world
leader, on one hand, and the key European player, on the other, in two very
different sectors that have nothing to do with one another at the end of the
day"11. One of the biggest areas of
concern about VU was its debt portfolio. Messier had taken $17 billion in debt
to finance some high profile deals since the time he had begun his
takeover/acquisition spree...
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The Downfall
Industry observers were of the opinion that the
rapid pace at which Messier was making acquisitions and the
questionable strategic logic behind some of them could land VU in
serious trouble...
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Messier Steps Down
Messer was also accused of concealing the severity of
the liquidity problems that the company was facing.
He had reportedly
issued several press statements saying that VU did not face any 'immediate and severe cash shortage.' This was however, not true, given
the company's precarious debt position and severe cash flow problems.
VU's share value had also dropped by 70% since the beginning of the
year. Even the company's board began to lose confidence in him... |
Exhibits
Exhibit I: VU - Consolidated Statement of Income
Exhibit II: Vivendi - Key Financials (1996-2000)
Exhibit III: Major Acquisitions made by Messier
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