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As head of Vivendi Universal, Jean-Marie Messier was the flamboyant king of spin — and in the end he flamed out. Now Messier's successor, Jean-René Fourtou, has a new title: the king of spinning off. In the 14 months since Fourtou took over the debt-laden French conglomerate (it has more than 6,000 individual holdings), he has been breaking down the empire piece by piece. Out went the cluster of Internet ventures that never lived up to their hype, the book and magazine publishers for which Messier overpaid, and the water utility that was once the company's core. Even its 18th century French manse, Château de Méry-sur-Oise, about 50 km northwest of Paris, is on the block.

Last week came the blockbuster spin-off, as Fourtou woke the company from Messier's Technicolor dream of becoming a major player in Hollywood. After an epic four-month auction among many of the world's largest media firms, the company signed a letter of intent with General Electric to merge its U.S. movie and TV businesses with GE's NBC. The result would be a new media giant that puts Vivendi's assets — Universal Pictures, theme parks in California, Florida, Spain and Japan, and four U.S. cable-TV stations — together with the No. 1 U.S.

Preparing for Takeoff NBC would add some feathers to its tail in a deal with Vivendi Universal TELEVISION and CABLE NBC has: An average of 11.7 million U.S. prime-time viewers for Friends, ER, etc. Cable: MSNBC, CNBC, Bravo, Telemundo Added: Ownership of the three Law and Order series. Access to archive of shows. Cable: USA, Sci Fi, Trio FILM Added: Universal Pictures, ranked third in box office for 2003 through Sept. 1. Recent films: Bruce Almighty, The Hulk. Access to Universal’s 5,000-film library OTHER PROPERTIES Added: Five Universal Studios theme parks

broadcast network. NBC would run the new company, which would have estimated annual revenues of about $13 billion. Vivendi would keep 20% of the new firm. In return, it would receive $3.8 billion in cash and reduce its debt by $1.6 billion — less cash than Vivendi's original price tag, but a deal nonetheless.

The lead actors are crowing over their triumph. "It was a long struggle," concedes Bob Wright, chairman and chief executive of NBC, who will head the company called NBC Universal if the deal goes through. "We want to be in the content creation and distribution business in a bigger way, over a longer period of time. Universal was an opportunity that came our way to do that." Investors appeared to agree. GE stock shot up the day the deal was announced and ended the week up 5% at $31.04. Vivendi stock was up over 4% in the week following the announcement to €16.90.

GE is betting that its hard-nosed approach to profitability can make the NBC Universal combination a success. It particularly hopes to leverage Universal's rich film library and successful TV production operations (see chart). Vivendi's future, on the other hand, is far from certain. "Vivendi remains a mixture of assets with little industrial logic," says Steve Liechti, an analyst at Merrill Lynch in London, echoing a common view among Vivendi watchers at big banks.

True, the nbc merger is a key step in Fourtou's campaign to stabilize Vivendi and slash its debt, which totaled €35 billion when he joined the company in July 2002. After the deal, it will be below €10 billion. Fourtou's problem is that Vivendi remains a jumble. It has some telecommunications businesses, plus the world's largest music company, Universal Music Group, and the French subscription TV station Canal Plus, neither of which is doing well.

Then there are the "noncore" assets: a remaining 20% stake in the water utility it spun off last year, Veolia Environnement, and a shareholding in Elektrim, a Polish telecommunications company. For a while Fourtou seemed to be betting on telecom: last year, even with his mandate to divest, he acquired BT Group's 26% stake in Cegetel, thwarting an attempt by Britain's Vodafone to take control. And last week, Vivendi's board signed off on a plan to increase its stake in a Moroccan telecom firm.

But if he wanted to focus principally on telecommunications, then Fourtou's most logical move would have been to sell the U.S. entertainment assets outright; Edgar Bronfman Jr., who originally sold Universal to Messier and is on Vivendi's board, offered $8 billion in cash. Fourtou himself acknowledges that he doesn't yet have a final strategy. One possibility, he said last week, is to split Vivendi into two companies: one focusing on entertainment, the other on telecommunications. "Should they remain together?" he asked. "I give myself a few more months to answer that question."

In the meantime, others question whether GE — the ultimate old-school, button-down business — will be comfortable with the highly volatile movie business. But Ron Meyer, head of Universal's entertainment division, insists: "This business isn't volatile if you manage intelligently and properly, which we do. It doesn't have to be like going to the craps table in Vegas." Maybe not. But by shifting his business vision every few months, Fourtou certainly looks like he's rolling the dice.

• PETER GUMBEL | Paris
• Vivendi's shareholders breathe a sigh of relief as the company finds a partner for its entertainment arm