(News Bulletin 247) – The Euronext scientific council announced this change on Tuesday. This modification within the index will be effective from Monday December 23.

It was expected: Vivendi will leave the CAC 40 and will be replaced by Bureau Veritas, announced this Tuesday, December 17, the scientific council of Euronext, the body in charge of the composition of the major indices of the Paris market. These changes will be effective from Monday, December 23.

Vivendi’s exit from the CAC 40 is not a big surprise. After its split into four listed entities on Monday, the group present in media and video games mechanically lost a large part of its market capitalization.

With the stock market independence of Canal+ (introduced on the London Stock Exchange), Havas (Amsterdam) and Louis Hachette Group (on Euronext Growth), Vivendi currently only weighs 2.6 billion euros. on the stock market compared to 8.5 billion euros before its split.

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Vivendi has become far too small

This market capitalization is light years away from the adequate size for the CAC 40. To give an idea, Teleperformance (whose place on the CAC 40 seems threatened) and Edenred, the two smallest capitalizations outside Vivendi, weigh respectively 4.8 billion euros and 7.6 billion euros.

Remember that floating capitalization, that is to say the capitalization which includes securities in free circulation and not held by long-term investors, such as the Arnault family at LVMH, constitutes one of the two main criteria (but not the only ones) on which the Euronext scientific advice is based, with the volumes.

After its split, Vivendi now only owns one 100% company, namely Gameloft. Vivendi SE still has several minority stakes (Banijay, Prisa, Telecom Italia, etc.) including its share of just under 10% in the record company Universal Music Group (UMG). These approximately 10% are supposed to weigh, based on UMG’s capitalization, around 4.4 billion euros. However, Vivendi only has a market capitalization of 2.6 billion euros. The market therefore inflicts a significant holding discount on the group.

Bureau Veritas, almost 200 years after its creation

On the side of Bureau Veritas, the ICT specialist (tests, inspections and certification) has been identified for some time as a contender for accession to the CAC 40. We also cited it in a previous article from December 2023 Its market capitalization of 13.5 billion euros is much more in line with the standards of the CAC 40 than that of Vivendi.

The company has had a good run this year on the Paris Stock Exchange, gaining 30% since January 1st. Bureau Veritas delivered satisfactory publications and notably raised, in July, its objectives for 2024, something rare for large listed groups this year. At the end of October, Bank of America praised the group’s growth, which amounted to 13.3% on a comparable basis in the third quarter. The establishment confirmed that Bureau Veritas was its preferred stock within its sector.

Founded in 1828 and originally specialized in ship inspection, Bureau Veritas will therefore enter the elite of the Paris Stock Exchange.

“By integrating the CAC 40, Bureau Veritas further strengthens the sectoral diversity of the Paris index, thus broadening the index’s exposure to the Business Services sector and the testing, inspection and certification sector ( TIC),” the company argued in a statement.

“This recognition is the culmination of a remarkable year for Bureau Veritas, marked by the launch of our new LEAP 28 strategy which aims to generate significant improvement in performance and returns for shareholders. Bureau Veritas operates in a growing market. growth driven by strong secular trends such as the energy transition, sustainable development and increased investment in infrastructure,” said Hinda Gharbi, managing director of the group, quoted in the press release.