The merger, which will be examined by shareholders of the three companies in late September, was not expected to face major regulatory barriers from anti-trust authorities in America, Canada or the European Union, he said.

Messier said he had not been taken aback by the 20-per cent dive in Vivendi's shares since the merger was announced in June. "Vivendi's fundamental value hasn't changed since the transaction was announced. The fundamental value of Vivendi Universal is the same as that of Vivendi. It's in the 120 to 150-price range. So investors will come back," he said.

Messier stressed Vivendi Universal would be the world's second or third biggest media company, would be profitable, have no debts and have a positive cash flow from the first year.

American investor-support anticipated
"We are convinced that as soon as the transaction takes place investors, particularly American investors, will give Vivendi Universal very strong support, he said. Messier said it made little sense for investors to watch the daily movements of the 15-per cent collar, which allows for more shares to be issued if the price of Vivendi stock drops by over 10 per cent. He also excluded any alteration in the terms of the merger, despite criticism from minority Canal Plus shareholders. "There's no reason why there should be the slightest alteration in the offers that have been made and put to the shareholders of the various companies," Messier said.

As part of the merger, Vivendi plans to keep hold of nearly all Canal's assets, including its international business and its 14-million-strong subscriber base, and take a 49-per cent stake in a new unit Canal Plus Programmes which will control the pay-TV station in France. The move is designed to circumvent a French law which bans any industrial company in Europe from owning over 49-per cent of a French TV channel.

Messier said work was progressing swiftly on the merger seven before the September shareholder meetings took place. Plans to sell off Seagram's drinks business and Vivendi's electricity generating unit `Sithe Energies' were well advanced. He said Vivendi Universal was particularly keen to offer music to mobile and Internet subscribers, counting on a world market worth $100 billion a year by the end of the decade, against $40 billion today.

After the merger takes place, the 300 million CDs Universal sells in Europe will come with a kit allowing users to connect to Vizzavi, the multi-access Internet portal Vivendi has launched with Britsh mobile phone operator Vodafone.

-- Reuters