Jean-Marie Messier and Barry Diller join forces to take on US media giants News Corp, AOL Time Warner and Disney
Media giant Vivendi Universal has taken another step towards establishing itself as one of the world's top media players with the£7bn acquisition of USA Networks, the US cable TV, film and TV production operation which includes TV shows Law and Order and Jerry Springer, writes David Wood.

The deal combines USA Networks' production division with Hollywood studio Universal's film studio and theme park operations. USA Networks chairman Barry Diller will take on the role of chairman and chief executive at the newly constituted joint-venture production entity Vivendi Universal Entertainment, which will house US production outfit USA Networks - rebranded as USA Interactive.

Diller will oversee the running of USA Interactive plus Hollywood studio Universal. According to USA Networks, the company's internet commerce group, including ticketmaster.com and Hotel Reservations Network, account for half of USA's $52bn interactive commerce market.

Commenting on the deal Diller said: 'I have over the course of the last year gained enormous respect for what [Vivendi Universal chief executive] Jean-Marie Messier is trying to accomplish in building a first tier media and entertainment company.'

The two media moguls have also agreed a non-competition pact between Vivendi Universal's TV and film businesses and USA Networks for at least 18 months.

The deal follows Vivendi's $1.5 billion investment in US satellite TV group EchoStar last week and gives Messier a further foothold in the US marketplace. Messier's aim is to compete with US media giants such at AOL Time Warner, News Corp and Disney.

Former Channel 4 chief executive Michael Jackson, who left in October to become president of USA Networks' entertainment division, is expected to take a senior role running Vivendi Universal Entertainment's TV and film production activities.