Vivendi and Telefónica enter into talks over GVT sale
29 August 2014 | Kavit Majithia
French group Vivendi is to enter into exclusive talks with Telefónica over the sale of its Brazilian broadband unit, GVT.
Telefónica has seemingly beaten competition from Telecom Italia, and convinced Vivendi to choose its bid of €7.45 billion to secure the asset and solidify its position in the Brazilian market.
The Spanish operator plans to integrate GVT with its existing Brazilian mobile business, Vivo, as it attempts to further tap into the growth of the Brazilian middle class.
According to the Financial Times, 40 million Brazilians have entered the middle class over the past ten years, turning the country into an essential telecoms market for global companies.
Telecom Italia’s slightly lower offer of €7 billion for GVT has been rejected, and there are now questions over whether it will exit the market by selling its TIM Brasil subsidiary.
Vivendi has been adopting a strategy that positions itself away from telecoms and focusses predominately on media and entertainment, and the sale of GVT is said to be significant in achieving that goal.
Telefónica’s offer includes €4.7 billion in cash and a 12% stake in the combined unit.
The deal, however, is likely to be scrutinised by the country’s anti-trust body, given the company’s increasing presence in the market.