Telefónica Says Launches Acquisition Offer For Brazil's GVT

(RTTNews) - Spanish telecom group Telefónica S.A. (TEF, TDE.L) said Tuesday that the company and Telefónica Brasil have submitted an offer to Vivendi for the combination of Telefónica Brasil and Global Village Telecom or GVT in Brazil.

The merger deal includes a cash payment of 11.9 billion Brazilian Reais and newly issued shares representing 12 percent of the share capital of the new Telefónica Brasil, after its combination with GVT.

Considering the current market price of Telefónica Brasil, the offer amounts to a total of 20.1 billion Brazilian Reais, or about 6.7 billion euros at current exchange rates.

The offer envisages that, should Vivendi be interested in acquiring a stable stake in Telecom Italia, Telefónica could offer Vivendi the acquisition, in cash, of up to 1,110 million ordinary shares of Telecom Italia, currently representing a stake of 8.3% of the Telecom Italia voting share capital. The transfer of the shares would take place at closing of the transaction between Vivendi and Telefónica Brasil.

The offer, whose terms expire on September 3, unless it is previously accepted by Vivendi, is subject to relevant regulatory authorizations and other customary conditions.

The combination of Vivo, the commercial brand of Telefónica in Brazil, and GVT would create the largest telecom operator in Latin America, and generate important synergies for the Group.