Jean-Marie Messier
1956–

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Former chairman and chief executive officer, Vivendi Universal

Nationality: French.

Born: December 13, 1956, in Grenoble, France.

Education: École Polytechnique, BS, 1976; attended École Nationale d'Administration, 1980–1982.

Family: Married Antoinette (maiden name unknown); children: five.

Career: French Ministry of Economy and Finance, 1982–1986, auditor of state-owned companies; 1986–1988, advisor to the minister of economy, finance, and privatization; Lazard Frères et Compagnie, 1988–1994, general partner; Compagnie Générale des Eaux (CGE), 1994–1996, chief executive officer; 1996–1998, chief executive officer and chairman; Vivendi Universal, 1998–2002, chief executive officer and chairman.

Awards: Person of the Year, French-American Chamber of Commerce, 2000; Chevalier de la Légion d'Honneur, government of France, 2001.

Publications: J6M.com. Faut-il avoir peur de la nouvelle économie?, 2000.

■ Jean-Marie Messier put himself and France on the map as a global business presence during his tenure as the chairman and CEO of Vivendi Universal, a media conglomerate that at one time was second only to AOL Time Warner in size and income. A graduate of two of France's most prestigious educational institutions, Messier nonetheless found himself behind bars in the summer of 2004 on criminal charges related to possible insider trading and other breaches of French securities law.

EDUCATION AND EARLY CAREER

Jean-Marie Messier was born in 1956 in Grenoble, a city in the Alps of southeastern France. The son of an accountant,

Jean-Marie Messier. AP/Wide World Photos.
Jean-Marie Messier.
AP/Wide World Photos
.

he was a serious and hardworking student in his high school years. Although he failed on his first attempt to gain entry to the École Polytechnique, the training ground of France's business elite, he retook the entrance examinations the following year and was admitted. He did well in his studies, graduating from the school with high marks in 1976. Messier then attended the École Nationale d'Administration, or ENA, the traditional educational route to a high position in the French government. After completing his course of study at ENA in 1982, he worked for four years in the French ministry of finance as an auditor of state-owned corporations. He became the chief of staff of the French finance ministry in 1986, several months before his thirtieth birthday.

Instead of climbing higher up the political ladder, however, Messier surprised observers by leaving government service in 1988 for a position with Lazard Frères et Compagnie, a major French investment bank. Messier quickly became the youngest partner in the bank's history. During his years at Lazard, Messier gave advice to French companies about expanding their businesses in the United States. A French journalist said of him at the time, "He was someone who was having an exceptional career. He was growing in power very quickly. He got the reputation of someone who was a very quick thinker" ( BBC News , July 19, 2002).

THE MAKEOVER OF CGE

Messier's next step in his career was to join the Compagnie Générale des Eaux, or CGE, in 1994 as its chief executive. CGE was an old-fashioned French water company, founded by Emperor Napoleon III in 1853. Its chief businesses in the early 1990s were garbage collection and sewage plant operation. Messier lost little time, however, in remaking CGE after he moved up to the chairman's position in 1996. He began to sell off divisions of the company that he considered outdated and to turn CGE into a media and telecommunications firm. In 1998 the company's name was changed to Vivendi Universal to fit Messier's new image of it.

Messier's first major move after the name change was to purchase a larger stake in Canal Plus, a French television company that produced programs associated with high culture. This purchase was followed by a wave of acquisitions of media and high-technology companies; at one point in 1999, Messier was completing an average of a deal per month. He became the most famous businessman in France. One analyst compared Messier's compulsive deal-making to substance addiction: "When you control media it's like when you control the world. That's what Messier wanted to do" ( BBC News , July 19, 2002).

Far from shrinking from the attention of the press, Messier appeared to enjoy the limelight. In 2000 he published his autobiography, J6M.com , whose title was certainly revealing. The six Ms stood for "(Jean)-Marie Messier, moi-même, maître du monde," which can be translated as "Jean-Marie Messier, me myself, master of the world."

TAKING ON THE UNITED STATES

In 2000 Messier made his most ambitious acquisition—one that attempted to break the American hold on the worldwide media industry. He announced a $34-billion merger with Seagram, a liquor company based in Canada that had gradually turned itself into a media giant. He also completed Vivendi's buyout of Canal Plus. The French public approved of Messier's merger with Seagram at the time because it appeared to be a successful challenge to what they considered American domination of global media. The president of France personally congratulated Messier, and the French-American Chamber of Commerce honored him as their Person of the Year for 2000. At the presentation of the Chamber's award, the French Ambassador to the United States praised Messier as "the prototype of a new breed of French executives that dispels the traditional clichés about France" (October 18, 2000).

Messier's buying spree was not over, however. In May 2001 Vivendi Universal acquired Houghton Mifflin, an American book publisher with a fine reputation for its lines of textbooks and reference works. This purchase was significant because it followed the collapse of the so-called dot-com bubble, when most corporate executives began to pull back on mergers and acquisitions.

Messier then turned French public opinion against him when he purchased a home in New York. According to a report in the Daily Telegraph , Messier used $17.5 million of Vivendi Universal's funds to buy a penthouse on Park Avenue in Manhattan. This purchase symbolized the beginning of Jean-Marie Messier's rise on the social ladder in New York City, but it also represented betrayal to the French. After Messier moved his family to the new apartment, the French began to regard his business deals in the United States as threats to the purity of French culture. Messier further insulted his compatriots when he made a remark in late 2001 to the effect that "the French cultural exception is dead." This remark was widely regarded as hostile criticism of the French government's subsidies of art and culture. The Daily Telegraph reported that "… President Jacques Chirac and Prime Minister Lionel Jospin weighed in, warning [Messier] against trampling all over French culture. Protestors have thrown rotten eggs at his office windows and the French media have reared up in indignation" (April 20, 2002).

DOWNFALL

The collapse of Messier's ambitions was almost as sudden as his rise. Part of the problem was financial. Vivendi had grown almost entirely through buyouts. As the dot-com bubble faded, it appeared that Messier had paid too much for some of his acquisitions. In addition, he had been paying for these acquisitions with stock shares rather than cash. His acquisitions strategy worked as long as Vivendi's share prices remained high, but when prices began to fall toward the end of 2001, the company found itself in serious trouble. At the close of 2001 Vivendi recorded the largest single loss—$14 billion—in the history of French business.

Another factor in Messier's downfall was his management style. According to the authors of The Man Who Tried to Buy the World , Messier had two very different faces. "In public, Messier played the role of a modern, approachable chief executive who believed in collegial management. Inside the company, he could appear authoritarian, sometimes cutting" (Johnson and Orange). One notable instance of Messier's inability to foresee the results of his authoritarian behavior was his firing of Pierre Lescure, the head of Canal Plus, in April 2002. The employees of the television company were furious; they flooded into the company's studios, stopped program transmission, and broadcast their protests live from the studios.

In addition to being high-handed, Messier also relied on his charismatic personality to sway the emotions of board members rather than using reason and logic to convince them of the wisdom of his business deals. Messier displayed an un-canny ability to play down the downside and pump up the upside of almost any situation. In essence, his superior communication abilities enabled him to persuade his fellow executives and even Vivendi's board to bypass rational decision-making processes in favor of being mesmerized by his ability to sell his vision. The predictable result of these emotionally charged meetings was a series of poor decisions and financial misadventures.

A week after the staff protests at Canal Plus, Messier had to answer to Vivendi's board at the company's annual general meeting. He defended himself, but was pressured to step down by the American as well as the French members of the board. Finally Jacques Chirac, the President of France, sent some of his allies in the French business community to increase the pressure on Messier. Messier finally resigned from Vivendi on July 1, 2002.

FURTHER DISGRACE

After being ousted by Vivendi, Jean-Marie Messier sat on the sidelines and watched his successor, Jean-René Fourtou, take over as chairman and CEO. Fourtou, the former chairman of Rhône-Poulenc, promptly sold an 80-percent stake of Vivendi's entertainment line to NBC, a General Electric company. Fourtou also reversed Messier's acquisitions strategy by breaking up Vivendi into smaller units and selling some of its assets. He was credited with rescuing the company from bankruptcy.

Meanwhile, Jean-Marie Messier made yet another deal that was characteristic of his flamboyant style—he negotiated an unheard-of severance package of EUR 20.5 million. This arrangement went sour as soon as the U.S. Securities and Exchange Commission (SEC) charged Messier with securities fraud. He settled with the SEC by using his severance package as part of the deal. Vivendi agreed in 2003 to pay the SEC $50 million to settle the action but without admitting liability, while Messier was barred from holding directorships in American firms for 10 years.

Worse was yet to come. Less than two years after resigning his position at Vivendi, Messier was arrested by the French police in June 2004 on charges of illegal share dealings. According to the Wall Street Journal , the charges were related to four issues: "Vivendi's massive stock buybacks after the Sept. 11, 2001, terrorist attacks; possible insider trading by Vivendi officers in December 2001; the accuracy of Vivendi's financial disclosures; and whether Vivendi should have consolidated three partly owned telecommunications subsidiaries in its accounts" (June 22, 2004). Critics of Vivendi's buyback maintained that it was an attempt to support the price of Vivendi's shares before the crucial results of the merger with Seagram were published.

Prior to Messier's resignation from Vivendi, he served on the boards of Alcatel, BNP-Paribas, Cegetel, Compagnie de Saint-Gobain, and LVMH-Moët Hennessy Louis Vuitton. He was also a member of the New York Stock Exchange.

See also entries on Canal Plus and Vivendi Universal S.A. in International Directory of Company Histories .

sources for further information

Broughton, Philip Delves, "Another Fine Messier," Daily Telegraph , April 20, 2002.

Bujon de l'Estang, François, Remarks at the Presentation of the Person of the Year Award 2000 to Jean-Marie Messier, October 18, 2000, http://www.info-france-usa.org/news/statmnts/2000/vivendi.asp" .

Carreyou, John, "Vivendi Ex-CEO Held, Questioned in Probe of Firm," Wall Street Journal , June 22, 2004.

Henley, Jon, and Mark Milner, "Messier Arrested in Shares Inquiry," The Guardian , June 22, 2004, http://money.guardian.co.uk/businessnews/article/0,11507,1244601,00.html .

Johnson, Jo, and Martine Orange, The Man Who Tried To Buy The World: Jean-Marie Messier and Vivendi Universal , New York: Portfolio, 2003.

"The Rise and Fall of Jean-Marie Messier," BBC News , July 19, 2002, http://news.bbc.co.uk/2/hi/business/2138445.stm .

Smith, Alex, and Katherine Griffiths, "Fat Cat Moi? I Have Let Down My Shareholders, So I Have Decided to Give Back My Pounds 3m Payoff," The Independent , August 19, 2003.

—William F. Martin



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