Vivendi : Report on the special dividend in kind and on the special interim dividend in kind

This is a free translation of the report "Rapport sur le dividende exceptionnel en nature et sur l'acompte sur dividende exceptionnel en nature devant être distribués en actions Universal Music Group N.V." issued in the French language and is provided solely for informational purposes to English speaking readers. In case of any discrepancy, the French version prevails.

REPORT ON THE SPECIAL DIVIDEND IN KIND AND ON THE SPECIAL INTERIM DIVIDEND IN KIND

TO BE DISTRIBUTED IN THE FORM OF UNIVERSAL MUSIC GROUP N.V. SHARES

The Management Board of Vivendi SE ("Vivendi") is asking the company's shareholders, at the Annual General Shareholders' Meeting to be held on June 22, 2021, to approve, in addition to the distribution of an ordinary annual dividend of €0.60 per share, the distribution of a special dividend in kind in the form of shares of Universal Music Group N.V. ("UMG") (the "Special Dividend").

If this resolution is approved and the UMG shares are admitted to trading on the regulated market of Euronext Amsterdam, the Management Board will then decide, subject to an interim balance sheet certified by the Statutory Auditors showing sufficient distributable earnings, to supplement the Special Dividend with a special interim dividend in kind in the form of UMG shares in respect of the current fiscal year (the "Interim Dividend").

The Special Dividend and the Interim Dividend (together, the "Distribution in Kind") would be paid in a single transaction on September 29, 2021, on the basis of one (1) UMG share for every one (1) Vivendi share held, in accordance with the terms and conditions described below. The UMG shares so distributed would represent a maximum of 60% of the share capital and voting rights of UMG and would be listed on Euronext Amsterdam before the date of their distribution.

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The purpose of this report is to inform Vivendi's shareholders of the main terms and conditions and tax treatment of the Distribution in Kind.

Shareholders should be aware that, as of the date of this report, the proposed Distribution in Kind has been submitted to the company's European Company Committee and the competent local employee representative bodies in accordance with applicable laws, in order to obtain the required opinions prior to the Annual General Shareholders' Meeting. Accordingly, Vivendi's Management Board reserves the right to amend or withdraw the resolutions relating to the proposed Distribution in Kind submitted to this meeting.

This report does not constitute (i) an offer to sell or subscribe or a solicitation of an offer to buy or subscribe for UMG shares, or (ii) a solicitation of a favorable vote to approve the distribution described herein, notably in any jurisdiction where such solicitation would be prohibited.

This report refers plan of distribution being proposed to Vivendi shareholders. For ease of reading, the present, future or conditional tense is used interchangeably.

United States of America

Shares and other securities may not be offered or sold in, or transferred to, the United States of America, absent registration or an exemption from registration requirements pursuant to the U.S. Securities Act of 1933, as amended. The UMG shares which constitute the Distribution in Kind have not been, nor will they be, as part of the Distribution in Kind, registered in the United States of America under the U.S. Securities

Act of 1933, as amended. The Distribution in Kind has not been approved or rejected by the U.S. Securities and Exchange Commission (the "SEC") or any other commission of a State of the United States of America, and neither these commissions nor the SEC have reviewed the accuracy or adequacy of this report. Any representation to the contrary may be considered a criminal offense in the United States of America.

Member states of the European Economic Area

This report does not constitute a prospectus or any other offering document within the meaning of Regulation (EU) 2017/1129 (as amended) and cannot be considered to contain all the information necessary for a potential investor to evaluate the possibility of an investment in Vivendi or UMG or that would be required to be included in a prospectus prepared in accordance with the requirements of Regulation (EU) 2017/1129 (as amended).

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1. TERMS OF THE DISTRIBUTION IN KIND

1.1 FEATURES OF THE DISTRIBUTION IN KIND

As a reminder, Vivendi's Extraordinary General Shareholders' Meeting of March 29, 2021, approved an amendment to the company's by-laws to allow Vivendi's General Shareholders' Meeting to decide, in the event of the distribution of dividends, reserves or premiums, that all or part of such distribution will be made by way of the delivery of assets in kind, including financial securities held by the company. In the event of an interim dividend payment, this option would also be available to the Management Board.

1.1.1 Percentage of UMG's share capital to be distributed and distribution ratio

As of the date of this report, Vivendi holds 80% of UMG's share capital and voting rights. On the date of payment of the Distribution in Kind, the shares comprising the share capital of UMG will be admitted to trading on the regulated market of Euronext Amsterdam and will all be of the same class and fully paid.

In addition to the distribution of the ordinary cash dividend, the Management Board is asking Vivendi's shareholders, at the Annual General Shareholders' Meeting, to approve the Special Dividend, the payment of which would be conditioned upon the Management Board's decision to pay the Interim Dividend and the admission of UMG's shares to trading on the regulated market of Euronext Amsterdam.

If this resolution is approved and provided that UMG's shares are admitted to trading on the regulated market in Amsterdam, the Management Board will then decide, subject to an interim balance sheet certified by the Statutory Auditors showing sufficient distributable earnings, to supplement the Special Dividend with the Interim Dividend.

Together, the Special Dividend and the Interim Dividend constitute the Distribution in Kind of UMG shares to Vivendi shareholders, which will be paid in a single transaction on the basis of one (1) UMG share for every one (1) Vivendi share held. Unless the Management Board were to adjust this ratio should the amount of the Distribution in Kind exceed the Ceiling (see Section 1.1.4), each person entitled to the Distribution in Kind will automatically be entitled to receive one (1) UMG share for every one (1) Vivendi share held.

Based on available information as of the date of this report, the Distribution in Kind would relate to a maximum of 1,087,916,887 shares of UMG held by Vivendi, which would represent, as of the date of the Distribution in Kind, a maximum of 60% of the total number of shares comprising UMG's share capital and as many voting rights.

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The total number of UMG shares to be distributed corresponds to the 1,086,266,883 Vivendi shares, as of April 30, 2021, which would be entitled to the Distribution in Kind1, plus 574,685 stock options that may be exercised between such date and the date of detachment and payment of the Distribution in Kind, and the transfer, scheduled for May 12, 2021 and May 18, 2021, of 1,075,319 shares currently held in treasury to beneficiaries of Vivendi's performance share plans. The total number of UMG shares would be adjusted, upwards or downwards, if the total number of shares entitled to the Distribution in Kind differed from the Management Board's expectations, without affecting the percentage of UMG's share capital distributed or the ratio of one (1) UMG share for every (1) Vivendi share held2.

Based on Vivendi's maximum potential share capital3, the holders of 91.63% of Vivendi's shares4 would be entitled to receive up to 60% of UMG's share capital, meaning that a shareholder holding 1% of the maximum potential share capital of Vivendi would receive 0.655% of UMG's share capital.

Upon completion of this transaction, based on the information available as of the date of this report, Vivendi would retain 20% of UMG's share capital and voting rights. However, Vivendi continues to receive expressions of interest from potential investors in UMG and may sell some of its UMG shares to a strategic partner either before or after the payment of the Distribution in Kind. Nevertheless, Vivendi intends to retain at least 10% of UMG's share capital over the long term.

1.1.2 Payment and beneficiaries of the Distribution in Kind

Payment of the Distribution in Kind is expected to be made on September 29, 2021, with detachment on September 27, 2021 (ex-date).

All Vivendi shareholders whose shares are registered in their name on the record date (the date on which positions are closed), which is expected to be September 28, 2021, at the end of the trading day preceding the ex-date, which is expected to be September 27, 2021 (after taking into account orders executed during the day of September 24, 2021, for which settlement-delivery will occur on September 28, 2021), would be entitled to receive the Distribution in Kind.

In the event of split ownership of shares, the beneficiary of the Distribution in Kind will be the legal owner (nu-propriétaire) unless otherwise agreed. Shareholders should consult their usual advisor on these matters.

The treasury shares held by Vivendi at the end of the trading day on the record date would not be entitled to the Distribution in Kind.

1.1.3 Amount and accounting treatment of the Distribution in Kind

The amount of the Distribution in Kind will be determined by multiplying the number of UMG shares distributed by the opening price of UMG shares on the regulated market Euronext Amsterdam on the ex- date of the Distribution in Kind.

As of the date of this report, 60% of UMG's share capital and voting rights is valued at €19,800 million. This valuation is based on the financial valuation work carried out by PwC and confirmed by EY, in connection with the contribution transactions that led to the merger, on February 26, 2021, within UMG of the entire share capital of each of Universal Music Group, Inc. ("UMGI") and Universal International Music B.V.

1. Excluding the 100,433,720 Vivendi treasury shares held as of April 30, 2021, a portion of which is intended to be canceled (please refer to Section 1.1.3 below).
2. The number of shares distributed could be adjusted to take into account the creation of new Vivendi shares, if necessary, depending on the number of stock options exercised by beneficiaries before the payment of the Distribution in Kind. This adjustment would not affect the percentage of UMG's share capital distributed or the distribution ratio.
3. i.e., 1,187,275,288 shares, taking into account the remaining 574,685 stock options exercisable as of April 30, 2021, which may result in the creation of 574,685 shares before the Distribution in Kind payment date.
4. i.e., 1,087,916,887 Vivendi shares, as determined above.

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("UIM"), owned jointly by Vivendi and the Tencent-led consortium and representing a combined equity value of €33 billion.

If the opening price of UMG shares on the regulated market Euronext Amsterdam on the ex-date of the Distribution in Kind were to change the amount of the Distribution in Kind from the estimated valuation of €19,800 million, this change would result in an increase or decrease, as the case may be, of the amount of the Interim Dividend. In no event shall the amount of the Distribution in Kind exceed the sum of (i) the €5,314 million proposed to the General Shareholders' Meeting of June 22, 2021 to be allocated to the accounts for the fiscal year ending December 31, 2020 as the Special Dividend, and (ii) the company's net earnings as of June 30, 2021, as will be shown in the balance sheet certified by the Statutory Auditors (together, the "Ceiling").

Should the amount of the Distribution in Kind exceed the Ceiling, Vivendi's Management Board would have full powers to reduce the number of UMG shares distributed so that the amount of the Distribution in Kind is equal to the Ceiling. In such case, the distribution ratio would be less than one UMG share for one Vivendi share.

Vivendi will issue a press release on the morning of the date of the payment of the Distribution in Kind (i.e., September 29, 2021), when the opening price of UMG shares on the regulated market Euronext Amsterdam on the ex-date of the Distribution in Kind is known, informing its shareholders of the final amount of the Distribution in Kind and confirming the ratio adopted for the Distribution in Kind or, as the case may be, informing its shareholders of the adjustment to the distribution ratio. In the event of an adjustment to the ratio, the rights forming fractional shares shall neither be negotiable or transferable. If the number of UMG shares to which a shareholder would be entitled by application of the adjusted ratio does not correspond to a whole number of UMG shares, the shareholder will receive the number of UMG shares immediately below this number, plus a cash payment for the balance, the amount of which will be calculated based on the price at which the UMG shares corresponding to the fractional shares were sold.

Subject to this reservation, the Distribution in Kind will be charged to the accounts as follows:

1. Concerning the Special Dividend, against the distributable earnings for €5,314 million. This total net amount to be charged to the accounts for the fiscal year ending December 31, 2020 corresponds to:
2. • The net earnings for fiscal year 2020 of €3,009 million less the total amount of the ordinary dividend of €651 million, i.e., a net amount of €2,358 million, it being specified that at the Annual General Shareholders' Meeting shareholders will be asked to allocate this net amount to "Retained Earnings" prior to the adoption of the resolution relating to the payment of the Special Dividend; and
   • Retained earnings carried over from prior years of €2,956 million.
3. Concerning the Interim Dividend decided by the Management Board, pursuant to Article L.232- 12 of the French Commercial Code, provided that a balance certified by the Statutory Auditors and drawn up during the year shows that Vivendi has, since the close of fiscal year 2020, generated sufficient distributable earnings, it would be paid out of the net earnings for the current fiscal year for €14,486 million.

It is specified that the transaction in which Vivendi contributed its 80% interest in the share capital and voting rights of each of UMGI and UIM to UMG was carried out at fair value on February 26, 2021, as it was a cross-border transaction and a spin-off followed by an eventual loss of control. This resulted in an estimated book value gain of €22,854 million after costs and taxes. This capital gain will be reflected in Vivendi SE's net earnings as of June 30, 2021.

1.1.4 Conditions for completion of the Distribution in Kind

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The Distribution in Kind would be conditioned upon:

1. Approval of the Special Dividend in Kind by Vivendi's shareholders at the Annual General Shareholders' Meeting on June 22, 2021;
2. Obtaining the approval/visa from the AFM (Autoriteit Financiële Markten, the Dutch Financial Markets Authority) on the listing prospectus and the effective admission of UMG's shares to trading on Euronext Amsterdam before or by September 27, 2021; and
3. The decision by Vivendi's Management Board to pay the Interim Dividend based on an interim balance sheet prepared as of June 30, 2021 and certified by the Statutory Auditors showing sufficient distributable earnings.

It is noted that in accordance with the UMG Shareholders' Agreement, the Tencent-led consortium has been asked to approve the decision to apply for the admission of UMG's shares to trading on the regulated market of Euronext Amsterdam. Subject to final documentation, the consortium has indicated that it intends to vote in favor of the amendments to UMG's by-laws and the governance changes necessary to effect the Distribution in Kind.

1.2 PROVISIONAL TIMETABLE FOR THE DISTRIBUTION IN KIND

The provisional timetable for the Distribution in Kind is as follows:

March 29, 2021	Approval by Vivendi's Extraordinary General Shareholders' Meeting of an
	amendment to the company's by-laws to allow the distribution of dividends
	and interim dividends in kind
May 12, 2021	Publication in the BALO of the Notice of Vivendi's Annual General
	Shareholders' Meeting and this report on the Distribution in Kind
June 4, 2021	Publication in the BALO of the Convening Notice of Vivendi's Annual General
	Shareholders' Meeting
June 22, 2021	Annual General Shareholders' Meeting called to approve, among other
	things, the financial statements for the fiscal year ended December 31, 2020,
	the ordinary dividend and the Special Dividend
June 25, 2021	Payment of the ordinary dividend
September 20, 2021	AFM approval/visa and publication of the prospectus for the admission of
	UMG's shares to trading on Euronext Amsterdam and the decision of
	Euronext Amsterdam to admit the UMG shares
	Vivendi Management Board's decision to pay the Interim Dividend
Before or by
September 27, 2021	Admission of UMG's shares to trading on Euronext Amsterdam
September 27, 2021	Ex-date of the Distribution in Kind (detachment)
September 28, 2021	Record Date (the date on which positions are closed) for beneficiaries of the
	Distribution in Kind
September 29, 2021	Payment of the Distribution in Kind (delivery and book-entry of UMG shares
	allocated pursuant to the Distribution in Kind)
October 15, 2021	Deadline for payment of social security contributions and/or withholding tax
	due

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