PARIS/MADRID, July 29 (Reuters) - European media group Vivendi has become a major shareholder in Spain's Telefonica after agreeing to swap shares in the telecom operator's Brazilian unit for those of the parent company.
Vivendi obtained about 7.5 percent of Telefonica Brasil when it sold its Brazilian broadband business GVT to Telefonica for a mix of shares and cash, in a deal that closed in May. As part of the deal, Vivendi accepted being paid in part in Telecom Italia shares.
With the agreement announced on Wednesday, Vivendi will exchange 58.4 million of its Telefonica Brasil preferred shares, or 3.5 percent, for 46 million Telefonica shares.
"Today's transaction reflects the group's intention to become more active in Europe and to pursue strategic partnerships there," said Vivendi in a statement.
Vivendi said the Brazilian antitrust authority CADE would also need to approve the swap.
Since Telecom Italia owns Brazilian mobile operator Tim Participaoes, Vivendi will be an indirect shareholder in both Tim and Telefonica Brasil. In the past when Telefonica held such parallel stakes, the Brazilian regulator pushed it to divest one or the other.
Vivendi's move to own Telefonica shares instead of Telefonica Brasil shares will help blunt at least some of the antitrust concerns, although it will still own a chunk of about 4 percent in Telefonica Brasil after the swap.
Reporting by Leila Abboud and Andres Gonzalez Estebaran; Editing by David Holmes