By Elvira Pollina and Bart H. Meijer
MILAN/AMSTERDAM (Reuters) - A Dutch court on Wednesday rejected a request by France's Vivendi <VIV.PA> to suspend Mediaset's plans to create a pan-European broadcasting holding company, an official document seen by Reuters showed.
Controlled by the family of former Italian Prime Minister Silvio Berlusconi, Mediaset <MS.MI> wants to merge its Italian and Spanish <TL5.MC> businesses into a Dutch unit, dubbed MediaforEurope (MFE).
The creation of MFE would be a first step in pursuing tie-ups with other European broadcasters in order to tackle growing competition in the industry from streaming rivals such as Netflix <NFLX.O>.
Vivendi, a major shareholder in Mediaset led by billionaire Vincent Bollore, is fighting the plan in courts across Europe, saying the governance structure of the new entity would strengthen Berlusconi's grip on the company.
The decision by the court increases the chance of the project being finalised. Shares in Mediaset closed up 4.5% on Wednesday.
Vivendi said it would appeal, as it believes that "if Mediaset's plan goes ahead, it would cause disproportionate damage to all minority shareholders".
Mediaset said in a statement that following the Dutch court's decision "MFE is confirmed and will proceed".
But the plan is on hold after a Spanish court upheld the request to suspend Mediaset's reorganization, pending a judge's decision.
Vivendi and Mediaset have been at odds since the French conglomerate in 2016 pulled out of an 800 million euro ($869 million) agreement to buy Mediaset's loss-making pay-TV unit.
The French group went on to build a 29% stake in Mediaset, a move which the Italian broadcaster considers hostile.
A legal case has been ongoing ever since. The two groups failed to clinch a comprehensive deal to settle their disputes, including the one related to MFE, in November.
The deadlock with Vivendi has been weighing on Mediaset shares, which have fallen almost 15% since the beginning of the year.
(Reporting by Elvira Pollina and Bart Meijer in Amsterdam; Editing by Jan Harvey)