Telefonica SA (TEF) agreed to buy Vivendi SA (VIV)’s Brazilian broadband unit GVT for about 7 billion euros ($9 billion) to increase its challenge to competitors including billionaire Carlos Slim’s America Movil SAB.
Vivendi will receive 4.66 billion euros in cash, a 7.4 percent holding in Telefonica’s Brazilian business and a 5.7 percent stake in Telecom Italia (TIT) SpA, Paris-based Vivendi said today. Madrid-based Telefonica said it’ll help finance the purchase with a capital increase by its Brazilian business.
Telefonica will boost its Brazil broadband market share to about 30 percent by buying GVT, compared with America Movil’s 32 percent and Oi SA’s 27 percent. By selling GVT, Vivendi continues to reduce its phone assets. Vivendi has announced more than $30 billion of disposals since last year, including the sale of French mobile carrier SFR, to focus on media.
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