French conglomerate Vivendi SA (VIV.L,VIVEF.PK) Friday announced a definitive agreement with Telefonica SA (TDE.L,TEF) to sell its wholly-owned Brazilian broadband unit Global Village Telecom or GVT to the Spanish telecom operator.
The agreement was signed on September 18, and includes a payment of 4.66 billion euros ($6 billion) in cash, as well as minority stakes in two telecom firms. A bank debt of around 450 million euros and adjustments in working capital will be deducted from this amount.
Vivendi will receive 7.4 percent of Telefonica Brasil shares, at a stock market value of 2.02 billion euros as of September 18, and 5.7 percent of Telecom Italia shares at a stock market value of 1.01 billion euros as of the same date.
The company will also be liable for tax, including on capital gains, estimated at around 500 million euros.
Vivendi's Supervisory Board authorized signing of the definitive agreement after obtaining a positive opinion from employee representatives.
The final agreement is subject to certain conditions, including the approval by the relevant regulatory authorities, notably Anatel (Telecommunications) and Cade (Competition) in Brazil.
The closing of the transaction is expected to take place before the end of the first half of 2015.
Vivendi had received two binding offers for GVT - from Italian phone carrier Telecom Italia S.p.A (TI, TIAOF.PK) and Telefonica SA. While Telecom Italia made a cash-and-share offer worth 7 billion euros for the GVT unit, the sweetened offer from Telefonica had a total enterprise value of 7.45 billion euros. Subsequently, Vivendi decided to enter into exclusive negotiations with Telefonica.
Vivendi was gaining 0.9 percent in early morning trade in Paris at 19.64 euros. Telefonica gained 1.7 percent in Madrid at 12.35 euros.
For comments and feedback contact: editorial@rttnews.com
Business News