Telefonica prevails in battle for Vivendi's Brazil unit GVT
By Leila Abboud
PARIS (Reuters) - French media company Vivendi (VIV.PA: Cotización) picked Telefonica (TEF.MC: Cotización) for exclusive talks over the sale of its Brazilian broadband unit GVT, spurning a rival bid from Telecom Italia (TLIT.MI: Cotización).
Telefonica will fold GVT into its Brazilian mobile phone carrier Vivo (VIVT3.SA: Cotización) to create the country's biggest telecom group. It will then use GVT's pay-TV and broadband know-how and its broad network to chase higher-value customers and keep profits growing as mobile subscriber growth slows.
Vivendi's decision deals a blow to Telecom Italia, which needed GVT to shore up its own Brazilian mobile business Tim Participações (TIMP3.SA: Cotización), which lacks a fixed-line network.
For Vivendi, the GVT sale caps a tumultuous two-year overhaul in which it sold three telecom businesses and its video games arm to pay down debt and focus more on media and content.
"The Telefonica offer best meets the group's strategic and financial objectives," said the French company.
"Vivendi begins a new phase in its development to become an integrated industrial group focused on media and content."
In a statement late on Thursday Telecom Italia acknowledged Vivendi's decision to choose Telefonica for exclusive talks over GVT.
"From the start Telecom Italia has made it clear it would take a disciplined approach to its strategy in Brazil," it said, adding it would continue to pursue development plans in the country in line with its 2014-2016 business plan. Continuación...