Brazilian antitrust regulator to consider joint analysis of Telefonica’s GVT deal, Telecom Italia exit

4 Sep 2014

Following the announcement just a few days ago that French media group Vivendi had entered into exclusive talks to sell its Brazilian broadband, pay-TV and fixed telephony operator Global Village Telecom (GVT) to Telefonica, Reuters reports that Brazil’s antitrust watchdog Cade could examine the deal in tandem with the Spanish telecoms group’s proposal to exit Telecom Italia (TI), ‘depending on how the deals are presented to regulators’.

With Telefonica having indicated it would divest any interest it has in TI once it completes the acquisition of GVT, and with the antitrust watchdog preparing to analyse the Spanish group’s mooted purchase, Cade president Vinicius Carvalho was cited as saying: ‘If in the middle of the transaction, there is the Telecom Italia stake that could be traded between Telefonica and Vivendi, it will be analysed as part of the entire deal.’

Telefonica’s role as a shareholder in TI has long been questioned by the Brazilian government, and as previously reported by CommsUpdate, in December 2013 Cade ruled that the Spanish company must relinquish its direct and indirect stakes in local mobile operator TIM Participacoes (TIM Brasil) or find another new partner for its own directly controlled telecom operation in the country. In its ruling, Cade noted the Madrid group’s failure to comply with the terms of a performance agreement – signed in 2010 – in which it promised not to participate in TIM Brasil’s management decisions or raise its stake in TI. In a further blow, Cade imposed a BRL15 million (USD6.3 million) fine on Telefonica for increasing its stake in Telco Holding – which owns 22.4% of the Italian giant – and fined TIM Brasil BRL1 million for appointing a consultancy company owned by the Spanish telco.

Brazil,Telecom Italia, Telefonica, Telefonica Brasil (Vivo), Global Village Telecom (GVT), Vivendi,

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