UPDATE 2-Mediaset's Dutch move gets green light in boost to M&A push

* Legal base shift agreed with Vivendi

* Mediaset wants to pursue M&A strategy

* Analysts warn move may be too late (Updates with shareholder vote, shares)

MILAN, June 23 (Reuters) - Mediaset shareholders on Wednesday backed a plan to make the Netherlands the legal base of Italy’s top commercial broadcaster, potentially paving the way for cross-border deals needed to fight competition from online rivals.

Like other traditional broadcasters, Mediaset is trying to reshape its business, which has been hit by the growth of web advertising giants such as Facebook and Google .

Controlled by the family of former Prime Minister Silvio Berlusconi through its Fininvest holding company, Mediaset has long been targeting cross-border growth in Europe.

The company, which will retain its tax base in Italy, has said the relocation will give its M&A strategy a neutral base from which to pursue expansion plans abroad, while simplifying its governance structure.

The plan, which initially envisaged a merger of Mediaset’s Italian and Spanish units under a Dutch holding, had stalled due to a legal row with the company’s second largest investor, French Media giant Vivendi.

But in May, the two groups reached a settlement to end the legal battle that had dragged on for the last five years, effectively paralysing Mediaset’s strategy.. As part of the deal, Vivendi has pledged to give its essential backing to the relocation to the Netherlands.

Fininvest owns 44% of Mediaset and Vivendi 28.8%, a stake it will reduce over time under the terms of the agreement.

Some 95.6% of the capital represented at the shareholders meeting backed the redomiciliation plan which Mediaset aims to finalise in September.

However, the long delay to Mediaset’s ambition to grow internationally may prove problematic, analysts said.

“Expanding abroad is mandatory for Mediaset to defend its role in the playing field but it may be too late,” said Augusto Preta, founder of advisory firm ITmedia Consulting.

Mediaset, which controls Spanish broadcaster Mediaset Espana , also has a stake in ProSiebenSat.1 Media and has repeatedly tried to involve the German group in its consolidation drive.

But ProsiebenSat.1 has shown little enthusiasm so far. . Elsewhere, a planned tie-up between TV broadcasters TF1 and M6 shows the French market is heading for in-country consolidation.

In the five years to 2020, Mediaset’s turnover has fallen by 28% to 2.6 billion euros ($3.11 billion), while Netflix , which launched its services in Europe in 2016, last year became the second largest broadcaster in the region in terms of revenue, based on data and analytics company Ampere Analysis.

For first time last year, online advertising spending in Italy surpassed TV advertising revenue in Mediaset’s key domestic market, historically dominated by traditional broadcasters, research firm Nielsen data showed.

“The European media sector must either find its path, or it will get increasingly smaller and become irrelevant,” Mediaset finance chief Marco Giordani told Reuters last month. “All shareholders in the media industry must think about that.”

Mediaset shares, which gained some 38% since the start of the year, fell 1.38% on Milan’s bourse by 1240 GMT against a 0.3% drop in Italy’s all-share index.

$1 = 0.8369 euros Reporting by Elvira Pollina, additional reporting Giancarlo Navach; editing by Valentina Za, Jane Merriman and David Evans