Telefónica sealed its deal to buy Vivendi’s Brazilian unit GVT for about €7.24 billion ($9.3 billion), cementing the Spanish telecommunications giant’s position in Latin America’s largest market. GVT’s sale comes after two years of transformation at France’s Vivendi, which has agreed to sell all of its majority stakes in telecommunications operators in a bid to reinvent itself as a pure-play media firm.
Telefonica has moved to strengthen its position in Latin America by agreeing the purchase of Brazilian broadband provider GVT from French media firm Vivendi, in a deal worth around €7.2bn. The deal is made up of €4.6bn in cash, from which a bank debt of around €450m and adjustments in working capital will be deducted, both companies said in a statement. As well as the cash, Vivendi will receive 7.4 percent of shares of Telefonica Brazil, valued at around €2.02bn. Vivendi will also receive 5.7 percent of Telecom Italia shares, which is valued at around €1bn. What’s interesting about this aspect of the deal is that, while Telefonica is Telecom Italia’s largest shareholder, the two are competitors throughout the South American market. In fact, Telefonica raised its offer for GVT specifically to price Telecom Italia out of the deal.