UPDATE 2-Vivendi raises stake in Telecom Italia to 19.9 pct
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By Valentina Za and Leila Abboud
MILAN Oct 6 (Reuters) - French media group Vivendi confirmed on Tuesday that it has raised its stake in Telecom Italia to 19.9 percent, in a move that tightens its grip on the Italian phone company at a time of industry consolidation.
The stake building brings Vivendi's overall investment in Italy's former monopoly to more than 3 billion euros ($3.4 bln) and cements its role as the biggest shareholder in the indebted company, which is seen as a potential takeover target.
Vivendi said the move confirmed its intention to develop its activities in southern Europe, in a statement analysts said could be a prelude to a deal involving Spain's Telefonica .
Vivendi, led by key shareholder and Chairman Vincent Bollore, has a 1 percent stake in Telefonica, which until earlier this year was the main investor in Telecom Italia.
Under Bollore, a 63-year old Breton billionaire, Vivendi is now focused on developing its remaining businesses -- Universal Music Group and French pay TV operator Canal Plus- and wants to turn itself into a media powerhouse to compete with Sky PLC and head off challenges from Internet-based players like Netflix.
Vivendi's investment in Telecom Italia is opportunistic and a financial bet, people close to the situation said.
Bollore aims to eventually steer the Italian group's strategy, particularly on the future of its Brazilian mobile operator TIM Brasil, which could be a predator or prey in long-mooted consolidation there. Continuación...