France Tel, Vivendi may merge cinema channels - report

PARIS (Reuters) - France Telecom's Orange and Vivendi's Canal Plus are in talks over a merger of their cinema pay-TV channels, two French newspapers said on Monday.

Canal Plus would bring its TPS Star movie channel and Orange at least one of the channels from its Orange Cinema Series platform to the 50-50 venture, dailies Le Figaro and La Tribune said.

The deal, if confirmed, would mark a truce between the two groups, which have been competing in French pay-TV for over two years.

France Telecom declined to comment while Canal Plus could not be immediately reached for comment.

The talks come after Stephane Richard, the new chief executive of France Telecom, announced plans to invest more in partnerships around content as part of a strategic plan to spur growth.

France Telecom has said it wants partners for its Orange Cinema and Orange Sport channels, which are currently marketed to its ADSL broadband customers only.

Confirmation the two groups are holding talks could come as early as Thursday when France Telecom unveils its first-half results, the newspapers said.

According to Le Figaro, Orange Cinema Series, which has over 480,000 clients, is valued at around 200 million euros (258 million dollars).

The French antitrust authority could back the plan as this would mean the end of Orange's policy to market its channels to its broadband customers only.

(Reporting by Cyril Altmeyer; Editing by Erica Billingham)