French media company Vivendi SA sold a 4 percent stake in Telefonica SA’s Brazilian unit for $877 million to complete its retreat from the South American nation.
Along with the conversion of another 3.5 percent holding in Telefonica Brasil SA into a 0.97 percent stake in Madrid-based Telefonica, Vivendi will no longer own stock in the Brazilian mobile-phone company, it said in a statement Thursday. Vivendi had received the Telefonica Brasil shares as payment for the disposal its broadband unit GVT to Telefonica, which was completed this year.
At Vivendi, Chairman Vincent Bollore has largely dismantled the legacy of former Chief Executive Officer Jean-Bernard Levy, selling telecommunications assets in France, North Africa and Brazil as well as shares in video-game maker Activision Blizzard Inc. Those sales have given Bollore financial resources to accomplish his goal of refocusing Vivendi on media and content.
The deal with Telefonica comes as Vivendi plans to seal strategic partnerships in Europe, the French company said.
The transaction “reflects the group’s intention to become more active in Europe and to pursue strategic partnerships there,” Vivendi said in a statement Wednesday to announce the agreement to acquire a minority holding in Telefonica SA. The share exchange requires approval by Cade, Brazil’s antitrust authority.
Vivendi will exchange 58.4 million preferred shares in Telefonica Brasil for 46 million Telefonica SA shares. The shares in the Brazilian business are preferred shares, which don’t grant voting rights. They do pay dividends. Telefonica is the biggest holder of both types of shares in Telefonica Brasil.
Last month, Vivendi increased its stake in Telecom Italia SpA to 14.9 percent, replacing Telefonica as the biggest shareholder in the Italian carrier. Vivendi is in favor of Telecom Italia exploring a sale of its Brazilian business Tim Participacoes SA, people familiar with the matter have said.