French conglomerate Vivendi said Friday that it has finally agreed a deal for the sale of its wholly owned Brazilian operation, GVT, to European carrier Telefónica. The agreement, signed Thursday, includes a payment of €4.66bn in cash.

James Middleton

September 19, 2014

1 Min Read
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French conglomerate Vivendi said Friday that it has finally agreed a deal for the sale of its wholly owned Brazilian operation, GVT, to European carrier Telefónica. The agreement, signed Thursday, includes a payment of €4.66bn in cash.

A bank debt of around €450m will be deducted from the cash transaction and Vivendi will also receive 7.4 per cent of Telefonica Brasil shares, at a stock market value of €2.02bn and 5.7 per cent of Telecom Italia shares at a stock market value of €1.01bn. Vivendi will also be liable for tax estimated at around €500m

The deal marks the end of a period of tense relations between the Spanish and Italian carriers as they have battled over the Brazilian arm of Vivendi.

Ultimately we could see the merger of Telefónica Brasil, which operates under the Vivo brand, with GVT. Vivo is the country’s biggest mobile player and claims to be the leading broadband services provider in the city of Sao Paulo. GVT is the most successful and fastest growing alternative operator in Brazil and according to Telefónica, a combination of Vivo and GVT would create the largest telecom operator in Latin America’s largest market, providing a unique offering and underlining Telefónica’s commitment to Brazil, a country where the operator has been making strong investments.

The final agreement is subject to certain conditions, including the approval by the relevant regulatory authorities, notably Anatel for telecommunications and Cade for competition in Brazil, which should take place before the end of the first half of 2015.

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About the Author(s)

James Middleton

James Middleton is managing editor of telecoms.com | Follow him @telecomsjames

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