Seagram Will Keep PolyGram Film Division

Seagram Co. said Wednesday that it will keep the international operations of PolyGram Filmed Entertainment after talks to sell the division to a Saudi Arabian prince broke down last week.

Seagram’s Universal Studios said it will integrate the PolyGram businesses, which it obtained through its $10.4-billion purchase of PolyGram. Stewart Till will continue to head the international film and video operations of PolyGram Filmed Entertainment. He will report to Chris McGurk, president of Universal Pictures.

Seagram had hoped to sell all of PolyGram Filmed Entertainment to help reduce debt taken on from the acquisition of the parent. A weak auction process forced it to sell the film unit in pieces, with part of the library going to Metro-Goldwyn-Mayer Inc. and part to Carlton Communications for a total of $400 million. Montreal-based Seagram had been in talks with Prince Muhammad bin Bandur Abdul Aziz to sell the remaining assets for as much as $600 million.

“After two months of extensive evaluation in determining the most amount of value that PFE brings to Universal, we have concluded that retaining PolyGram’s international operations provides the strongest strategic advantage,” said Ron Meyer, president and chief operating officer of Universal Studios.

Seagram said it continues to evaluate the unit’s domestic operations, which include Gramercy Pictures, and will make a decision about them shortly.