S&P: Vivendi ratings unchanged

Standard & Poor's said that its ratings and outlook on Vivendi Universal SA (BBB-/positive/A-3) remain unchanged following the company's announcement that its 56%-owned subsidiary SFR (not rated) - France's second-largest mobile telephone operator - has agreed to combine its fixed-line telephony and internet access business Cegetel with competitor Neuf Telecom (not rated).

S&P said it expects the transaction's net cash impact on Vivendi will be small.

The deal will nevertheless help Vivendi boost profitability at SFR, its largest dividend contributor, while crystallizing a commitment of about €400 million at year-end 2004 ($513 million), already included in S&P's debt calculations, to buy out the 35% minority stake held by state-owned national railway company Société Nationale des Chemins de Fer Français in Cegetel.

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