Vivendi Bids $2.9B for Brazilian Telco

French telecom and media giant Vivendi has launched a $2.9 billion friendly offer to acquire Brazilian alternative telecom operator GVT , in an effort to boost its presence in emerging markets.

The tender offer for the Brazilian operator is Vivendi's second attempt to acquire its way into high-growth telecom markets. The company recently was in talks to splash out around $12 billion on Zain Group 's African mobile operator assets, but it ended those discussions in July. (See Vivendi Wants Zain's African Assets and Vivendi Breaks Off Zain Talks.)

Now, Vivendi, which owns a 56 percent stake in French fixed and mobile operator SFR and a 53 percent stake in Morocco's national operator Maroc Telecom , wants to be a telecom player in Brazil, the biggest telecom market in Latin America by service revenue. (See Top 10 Telecom Markets: Latin America.)

Vivendi has agreed with GVT's majority shareholders -- Swarth Group and Global Village Telecom (Holland) BV -- to launch an "amicable" tender offer for 100 percent of GVT's shares at a price of 42 Brazilian reais ($23) per share, which values the Brazilian operator at 5.4 billion Brazilian reais ($2.9 billion).

Before the deal can go through, though, Vivendi needs at least 51 percent of GVT's capital, as well as complete due diligence and final approval from its board by Oct. 16.

Vivendi -- which recorded revenues in the first half of 2009 of €13.1 billion ($19 billion), of which €7.4 billion ($10.7 billion) came from its telecom businesses -- says it wants to "enable GVT to continue with its accelerated growth." And the French company apparently has big plans for IPTV in Brazil as it singled out this service as a new market that it can help GVT move into.

GVT is an alternative fixed-line operator with 2.3 million lines in service, which includes voice, broadband, data, and VoIP. The service provider's revenues were $800 million for the 12-month period ending June 30, 2009. And the company is growing. GVT's revenues have grown at a compound annual growth rate of 31.1 percent between 2006 and 2008.

According to Pyramid Research 's latest Country Intelligence Report on Brazil, telecom revenues (fixed and mobile) in the country totaled $55.8 billion in 2008 and are projected to hit $64 billion by 2013. The Brazilian market is expected to grow at an annual rate of 2.9 percent through 2013, driven by fixed and mobile data services.

— Michelle Donegan, European Editor, Unstrung