Vivendi Offers $2.9 Billion For GVT
French entertainment company Vivendi has made a bid to acquire GVT, a major Brazilian telecommunications company. If the acquisition takes place, Vivendi would become a major competitor of Telefónica of Spain. Vivendi offered $22.95 per share (42 reais) to gain 100% of GVT’s capital.
According to Vivendi CEO Jean-Bernard Lévy, this acquisition would lift the earnings over the next year and will not affect the credit ratings or dividend policy. Telefónica could counter the bid with a deal of their own. Currently Telefónica has a 31% market share in Brazil.
GVT has a 4% market share with 2.3 million customers and $800 million revenue. GVT’s controlling shareholders are the Swarth Group and Global Village Telecom. They agreed to sell at least 20% of their outstanding shares. Vivendi wants at least 51% ownership.This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at +AmitChowdhry