(Corrects to reflect that deal has not yet closed)
* Deal valued at 7.2 billion euros in cash and shares
* Vivendi accepts Telefonica's stake in Telecom Italia
* Sale expected to close by mid-2015
By Dominique Vidalon and Tracy Rucinski
PARIS/MADRID, Sept 19 (Reuters) - French media group Vivendi has finalised an agreement to sell its Brazilian broadband business GVT to Spain's Telefonica for cash and shares worth around 7.2 billion euros ($9.29 billion), the companies announced on Friday.
The deal is subject to regulatory approval in Brazil.
Telefonica plans to fold GVT into its Vivo-branded Brazilian mobile phone business to create the country's biggest telecom group, Telefonica Brasil.
Under the deal Vivendi will get not only a 7.4 percent stake in Telefonica Brasil and 4.66 billion euros in cash but has also opted to take off Telefonica's hands its remaining stake in Telecom Italia -- 8.3 percent of Telecom Italia's voting share capital, or 5.7 percent of its total share capital.
Vivendi had had the option to take the Telecom Italia stake or a further 4.6 percent of Telefonica Brasil.
For Telefonica the deal brings its Brazilian mobile business and GVT's broadband network together as telecom firms increasingly look to offer bundles of mobile and fixed line services including broadband internet and TV.
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 as part of a strategy championed by chairman Vincent Bollore.
Part of Vivendi's hunt for content will centre on Italy given its new stake in Telecom Italia following the GVT deal, which it expects to be completed by mid-2015 after regulatory approval.
Analysts have suggested that a partnership between Vivendi, which owns French pay-TV operator Canal Plus, and Mediaset Premium could make sense.
Telefonica is Telecom Italia's largest shareholder but the two have had a tense relationship for years as they also compete in Brazil.
Following the sale of its stake to Vivendi and the conversion of a three-year exchangeable bond issued earlier this year, Telefonica will have ended its seven-year partnership with Telecom Italia.
In the financial breakdown of the GVT deal, bank debt of around 450 million euros and adjustments in working capital will be deducted from the cash element. The Telefonica Brasil stake was valued at 2.02 billion euros as of Sept 18 and the Telecom Italia shares being acquired by Vivendi at 1.01 billion euros.
Vivendi will also have a tax bill to pay on the sale estimated at around 500 million euros.
Telefonica, which will finance the deal through a capital increase by its Brazilian business and at the parent company, has estimated synergies of at least 4.7 billion euros in Brazil from the deal. (1 US dollar = 0.7750 euros) (Editing by Jane Merriman and Greg Mahlich)