Spain’s Telefonica has boosted its Brazilian presence, with the acquisition of World Village Telecom (GVT) from Vivendi.
The deal, which was already anticipated to happen is price round EUR4.sixty six billion and likewise leaves Vivendi with a 12 p.c stake within the merged Brazilian firm.
As a part of the settlement, Vivendi has accepted Telefónica’s provide to accumulate eight.three% of Telecom Italia’s voting share capital, in trade of four.5% of Vivendi’s capital within the firm ensuing from the combination between Telefónica Brasil and GVT.
In whole, Vivendi is getting EUR4.sixty six billion in money for GVT, and EUR3.03 billion in shares in Telecom Italia and the enlarged Telefonica Brasil — giving the deal a internet value of round EUR 7.sixty nine billion.
Vivendi may even be answerable for tax (together with on capital beneficial properties) estimated at round EUR500 million.
The money cost for this transaction can be financed through a capital enhance at Telefónica Brasil, which Telefónica. will subscribe in proportion to its present stake of seventy four% in its Brazilian subsidiary and can fund, in flip, by way of a capital improve.
The operation is predicted to generate value financial savings of at the least EUR four.7 billion.
GVT owns a big new technology community with over 10.four million properties handed in 21 Brazilian states and greater than 2.5 million broadband clients, most of them situated exterior of Sao Paulo.
Closing of the deal is predicted by the center of subsequent 12 months.