Telefonica in €6.7bn bid to create largest Brazilian telecoms group
TELEFONICA, the Spanish telecoms giant and owner of British mobile operator O2, has made a €6.7bn (£5.3bn) bid for Brazilian broadband firm GVT, owned by French media conglomerate Vivendi.
The move is Telefonica’s second attempt to acquire GVT. It was initially beaten by Vivendi in an auction in 2009, as it seeks to strengthen its position in the Brazilian market which accounts for one-fifth of its revenue through its mobile operator Vivo.
The French company said that none of its units was for sale, but it would consider Telefonica’s offer at its next board meeting at the end of August.
“A combination of Vivo and GVT would create the largest telecom operator in Latin America’s largest market, providing a unique platform for the generation of synergies and value creation,” said Telefonica on the offer.
Telefonica said its offer consisted of an 11.96bn Brazilian reais (£3.14bn) payment in cash plus new shares to be issued in Telefonica Brazil worth 12 per cent of the larger group.
“With Vivendi’s focus on becoming a media company, we haven’t thought it made much sense for Vivendi to continue to own GVT, whereas, GVT would fit nicely into Telefonica Brazil’s existing assets,” said Morningstar equity analyst Allan Nichols.