By Jessica Sier

Mediaset SpA said late Friday that the Court of Milan has rejected appeals from French shareholder Vivendi SA and asset trust Simon Fiduciaria against its plan to create MediaForEurope, a pan-European media-holding company.

The Italian broadcasting company said the judges found Vivendi acted not as a partner but as a competitor when it opposed Mediaset's project to merge its Italian and Spanish operations under a Dutch holding company.

"Vivendi objectively puts itself in a situation of potential conflict with Mediaset in terms of expansion in the European media markets," Mediaset reported the judges as saying. "Given the position of the two companies, it is easy to recognize that Vivendi could very well find strategies to limit and shrink Mediaset's activities, functional to its very broad interests."

The judges also found the MediaForEurope project had been positively received by the market, contrary to Vivendi's claims.

Additionally, the court denied Vivendi's submission that the merger had no industrial value, Mediaset reports.

"The merger operation has a substantial economic and commercial rationale... and is an important strategic objective for the Mediaset Group to become a leading player in the European communication and media market," the court said, according to Mediaset. 



  Write to Jessica Sier at jessica.sier@wsj.com