Vivendi said today it has closed a deal to acquire the pay TV business of Italian media conglom Mediaset as part of a strategic alliance with Silvio Berlusconi’s outfit. The deal sets the way for Vivendi to push forward with plans to create a pan-Euro free-to-air, pay TV and over-the-top platform that can compete with everyone from Netflix to Sky and other competitors.

As previously reported by Deadline, the deal sees the two companies swap 3.5% of each other’s stock, with Vivendi also acquiring control over Mediaset Premium, in which Mediaset owned 89%. Vivendi will also take over the remaining 11% owned by Spain’s Telefonica.

“The agreement with Mediaset confirms Vivendi’s intention to build strong positions in Southern Europe, a market that shares a similar Latin culture and roots,” Vivendi said in a statement.