Tuesday, August 5, 2014

España/Brazil: Spain's Telefónica Offers to Buy Paris-Based Vivendi for US$9 Billion

According to The Latin American Tribune, Spanish telecom giant Telefónica is offering to buy Paris-based Vivendi’s Brazilian unit for 20.1 billion reais ($9 billion).

The offer for Vivendi’s Global Village Telecom (GVT) unit is good until September 3, Telefonica said in a filing with Spain’s National Securities Market Commission (CNMV).

GVT would be merged into Telefónica Brasil if the deal is approved, the Spanish telecom giant said.

Vivendi would receive 11.96 billion reais (about $5.3 billion) in cash and stock representing a 12% interest in Telefónica Brasil worth slightly more than 8.1 billion reais (about $3.6 billion).

A merger of Telefonica Brazil and GVT would create the largest telecom operator in Brazil, the biggest telecommunications market in Latin America, Telefónica said.

COMMENT: Telefónica is also offering to sell Vivendi up to 1.11 billion shares of Telecom Italia, representing an 8.3% stake.

Vivendi said it was not looking to sell any of its units but would study Telefónica’s offer.

“Vivendi wishes to emphasize that none of its subsidiaries are for sale. Its strategy is to create an industrial group focused on the organic growth of its activities and to support them in their development,” the French company said in a statement released Tuesday.

The board of directors “will consider the Telefónica offer at its next meeting, in the best interests of its shareholders and the GVT employees, and will decide what action to take as a result,” Vivendi said.