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.