French media group Vivendi makes a "strategic alliance" with Italy's Mediaset in an aim to create "the first pan-European on-demand streaming content platform"

France's media firm Vivendi and Italy's Mediaset said Friday they had clinched a deal as part of the French group's strategy to build a European media giant to rival US streaming powerhouse Netflix.

The partnership will see the companies swap 3.5 percent stakes in a "strategic alliance" aimed at "capturing new opportunities across the international competitive landscape," Mediaset said in a statement.

Vivendi will take complete ownership of Mediaset Premium, the Italian company's loss-making pay TV arm.

"The agreement will foster the creation and distribution of new international contents by leveraging on the production strengths and cultural affinities of Italy, Spain and France," it said.

The deal ends months of speculation over a tie-up between Vivendi and Italy's biggest commercial broadcaster, controlled by Italy's former prime minister, billionaire Silvio Berlusconi.

Mediaset said the aim was to create "the first pan-European on-demand streaming content platform," bringing together the online properties of the two groups in Italy, France, Spain and Germany to offer a wide ranger of films and TV series.

"The aim of the new platform will also be to distribute dedicated original productions. The new project also forecasts expansion in countries where the two companies are not currently present," it said.

By snapping up Mediaset Premium, Vivendi is expanding a global pay TV network already established in France, Poland, Africa, Central America and the Far East, the company said.

Would-be giants are faced with a rapidly evolving scene with global video contents on the up, the emergence of International OTT players ("over-the-top content", the delivery of media directly over the Internet) and the increasingly transnational structure of pay TV players.

News of the deal followed Vivendi's announcement this week that it is launching Studio Plus, a production label dedicated to international series in multiple languages for mobile screens, from smartphones to tablets.