Telefonica has launched its €3bn (US$3.29bn) rights issue after receiving regulatory approval for its US$9.3bn acquisition of Brazilian broadband provider GVT from Vivendi.
Yesterday, Brazilian competition authority Cade cleared the €7.24bn…
Telefonica has launched its €3bn (US$3.29bn) rights issue after receiving regulatory approval for its US$9.3bn acquisition of Brazilian broadband provider GVT from Vivendi.
Yesterday, Brazilian competition authority Cade cleared the €7.24bn (US$9.3bn) cash-and-stock deal, imposing a number of remedies to address competition concerns.
Earlier this month, telecoms regulator Anatel approved Telefonica’s transfer of 8.3% of its voting shares in Telecom Italia (TI), corresponding to a 5.7% direct stake, to Vivendi. Following Telefonica’s exit, TI’s holdco Telco Spa will be dissolved.
As part of the deal, Vivendi will also receive 11.3% of Telefonica’s preferential shares in Brazilian carrier Vivo.
Cade said that Telefonica must divest its remaining 6.4% voting shares in TIM Brasil owner Telecom Italia, and that Vivendi must gradually reduce its interest in Vivo, so that they each only hold shares in a single Brazilian telco.
“With the acquisition of GVT, Telefonica reaffirms its trust in Brazil and in the potential of its telecommunication market, a key sector for the growth and competitiveness of the whole country,” Telefonica stated.
GVT CEO to head merged group
GVT current CEO and co-founder Amos Genish will head the combined GVT-Vivo group, succeeding Paulo Cesar Teixeira, current Vivo CEO, who will leave the company to pursue other professional projects.
In his new role, Genish will be responsible for leading the integration process and defining a customer oriented strategy.
Antonio Carlos Valente, Vivo’s current chairman, will remain non-executive chairman of the board, eventually assuming new responsibilities as group representative in Latin America.
Owning GVT, which owns a new-generation network passing more than 10.4 million homes in 21 Brazilian states, will enable Telefonica to better compete with local rivals America Movil-owned Claro and Oi in broadband.
The deal will expand Telefonica’s footprint outside the largest city of Sao Paulo, where the majority of GVT’s 2.5 million broadband customers reside.
The Madrid-based telco has reportedly been waiting for the GVT deal to close before submitting a joint bid with Oi and Claro to acquire and break up TIM Brasil.
