France's Vivendi Universal and Lagardere, the world's largest magazine publisher, are negotiating a potential merger, a French weekly newspaper reports.

France's Vivendi Universal and Lagardere, the world's largest magazine publisher, are negotiating a potential merger, a French weekly newspaper reports.

Officials for Lagardere and media conglomerate Vivendi declined comment on the report.

According to Le Canard enchaine, the two companies have been in talks for weeks. It quoted a source close to the issue as saying "Things are not yet clear neither on Vivendi's side nor Lagardere's."

Le Canard said under the potential merger, Vivendi CEO Jean-Rene Fourtou would head the new group for two years before making way for Lagardere chief Arnaud Lagardere.

The government had been consulted discretely on the potential merger and had given its blessing, it said.

"An argument was put forward that such a merger would ensure that Cegetel-SFR (Vivendi's telecommunications unit) would not fall into British hands," the paper said. British telecommunications giant Vodafone Group Plc owns 43.9% of SFR.

--Reuters

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