Vivendi buys MP3.com

Music giant Vivendi Universal is buying online music-sharing site MP3.com for about $372m.

The French company sees MP3 as integral to its efforts to sell more music over the internet.

MP3.com holders would get $5 a share, 66 per cent more than the company's closing price of $3.01 on Friday. The shares have traded as high as $28.

Vivendi says MP3 will continue operating as a standalone online destination but added that its technology will be incorporated in another online venture, Duet, which is being developed with Sony.

"Their engineering and digital expertise will be a tremendous advantage for Vivendi Universal, especially in the digital distribution of all Vivendi Universal content and the creation of common technology platforms," said Jean-Marie Messier, Vivandi Universal's chairman.

Last year, MP3.com settled copyright suits with all five of the major record labels, including Vivendi's Universal Music, to which MP3.com paid $53.4m.

In total MP3.com has paid out $130m to the major record labels during the past year and faces several more lawsuits by small companies. Earlier this month singers themselves jumped on the lawsuit bandwagon.

Nevertheless, MP3.com has signed licensing agreements with the five top music companies and provides access to music from 150,000 artists.