Telefonica moves on Brazilian ISP GVT

Telefónica and its Brazilian subsidiary on Tuesday submitted an offer to merge with Brazilian ISP Global Village Telecom (GVT) for around €6.7bn and a 12 per cent stake in the share capital of the new entity. GVT is owned by French conglomerate Vivendi.

The move would see the merger of Telefónica Brasil, which operates under the Vivo brand, and GVT. To sweeten the deal, Telefónica has also put an 8.3 per cent stake in Telecom Italia on the table. At present, Telefónica owns around 10.28 per cent of the Italian carrier’s voting capital.

Vivo is the country’s biggest mobile player and claims to be the leading broadband services provider in the city of Sao Paulo. GVT is the most successful and fastest growing alternative operator in Brazil and according to Telefónica, a combination of Vivo and GVT would create the largest telecom operator in Latin America’s largest market, providing a unique offering and underlining Telefónica’s commitment to Brazil, a country where the oeprator has been making strong investments.

Vivendi confirmed receipt of the offer but said it “wishes to emphasize that none of its subsidiaries are for sale.”

However, the company said it will consider the 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.”

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