French media giant Vivendi Universal has continued its debt-cutting exercise by selling Italian pay-TV unit Telepiu for nearly 900m euros.

News Corp chief Rupert Murdoch announced on Tuesday that News Corp, together with its Italian partner Telecom Italia, would be buying Telepiu.

News Corp intends to merge Telepiu with its own Italian pay-TV channel, Stream, to create the dominant pay-TV service in the country.

"This is a world class property in an untapped market without cable competition," News Corp chief Rupert Murdoch said.

Sale strategy

The sale of Telepiu progresses Vivendi's strategy, under its new chief Jean-Rene Fourtou, of selling subsidiaries to raise cash and ease its debt burden.

Last week Mr Fourtou said the company intended to raise 12bn euros (�7.54bn; $11.8bn) through sales over the next 18 months.

Offers for its editing division Vivendi Universal Publishing and telecoms business Cegetel are being studied.

Mr Fourtou had also said last week that the sale of Telepiu to News Corp was close to being completed.

Talks between the two sides have lasted nine months, and Vivendi is getting much less than the initial price tag of 1.5bn euros.

But analysts said Vivendi would be happy to have completed the sale.

"They (Vivendi) are lucky to be exiting because Murdoch could have turned the screws," said Nicola Stewart, an analyst at WestLB Panmure.