Brazil green-lights Telefónica-GVT buyout

DetailsJuan Fernandez Gonzalez | 28 December 2014

Brazil's national telecoms authority, Anatel, has authorised Telefónica's bid to buy Vivendi Group's GVT.

The Spanish telco will pay over €4.5 billion and will become the market's third pay-TV player, second broadband provider and clear leader of the mobile industry.

In addition to paying the agreed amount to Vivendi, Telefónica will give 12% capital of its Brazilian subsidiary to the telecom group as well as 5.7% of Telecom Italia shares.

According to Telefónica, the deal will consolidate its leadership position in Brazil as GVT has a fibre network throughout the country with 10.4 million connected homes, through which it offers Internet and pay-TV services.

After the operation, the resultant company will be Brazil's second largest provider of broadband services, with almost 30% of the market, and the third player in the pay-TV sector, with 8.15% following América Móvil (53%) and DirectTV Sky (29%).

The deal will also drive Telefónica to strengthen its position as a leader of the mobile market, in which it currently has a 28.6% share, reaching over 100 million subs and nearing €14 billion revenue per year.