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Vivendi: Adieu to entertainment

The faltering French media giant will keep its Universal Music Group unit for now, however, and bet the company's future on telecom, according to Vivendi's chief executive.

PARIS--Faltering French media giant Vivendi Universal plans to unload most of its U.S. entertainment business but will not immediately sell its Universal Music Group division, CEO Jean-Rene Fourtou said.

Rumors of a possible sale of Universal Music Group circulated in the weeks preceding Tuesday's shareholder meeting, with Apple Computer and Microsoft said to be among potential buyers courted by the company. But Fourtou on Tuesday left the future of the division up in the air.

Vivendi is struggling with a crippling debt taken on in a bid by former CEO Jean-Marie Messier to transform a sleepy French utility into a modern media titan, straddling the Internet, television, music and publishing.

In 2002, the company recorded a net loss of about $26 billion (23.3 billion euros) on sales of about $32 billion. The company said it hopes to become profitable in 2003.

Fourtou said the company would focus on its telecommunications businesses, which include French cable company Canal Plus, phone company Cegetel and mobile service provider SFR.

On Tuesday, Edgar Bronfman Jr., vice chairman, defended his role in helping manage the company through its recent difficulties. Responding to a question from the audience, he said he was the first to act to oust Messier and his "irresponsible management." Bronfman was instrumental in brokering the $34 billion merger between Seagram, Vivendi and Canal Plus that created the company in late 2000.

ZDNet France's Jerome Thorel reported from Paris.