As expected, Vivendi has increased its stake in Telecom Italia to 14.9%, replacing Telefonica as the Italian incumbent’s biggest single shareholder.
The French media group agreed to acquire a 12% stake in Telefonica Brasil as part of the sale of its Brazilian broadband arm GVT. Under the terms of the deal, Vivendi exercised an option to exchange just over a third of that stake – 4.5% – for 8.3% of Telecom Italia’s ordinary shares.
On Wednesday, Vivendi confirmed it has received 8.24%, or 1.11 billion, of Telecom Italia’s ordinary shares.
Vivendi has also paid €1 billion for an additional 4.76% of Telecom Italia, which together with a 1.9% stake Vivendi acquired in yet another recent and separate transaction, comes to 6.66%.
In total, "Vivendi now owns 14.9% of Telecom Italia’s ordinary shares and has th us replaced Telefonica as the company’s largest shareholder," said Vivendi, in a statement.
The announcement was in line with a Reuters report earlier this week in which sources claimed Vivendi was preparing to increase its holding in Telecom Italia.
The deal is likely to set up a showdown with Brazil’s antitrust authorities, since Vivendi owns 7.5% of Telefonica Brasil and is now the biggest single shareholder in Telecom Italia, which owns TIM Brasil. As a result, Vivendi could try to force Telecom Italia to sell TIM Brasil.
Indeed, sources cited in a Bloomberg report last week claimed that Vivendi chairman Vincent Bollore is keen for Telecom Italia to do just that.
Meanwhile, Vivendi said its investment in Telecom Italia fits with its group strategy, which is unusual because Vivendi’s group strategy over the last few years has been to exit telecoms and focus on content.
And with content becoming an integral element in the strategies of major operators, it is conceivable that Vivendi’s Telecom Italia deal could mark the start of a renewed role in telecoms.
Furthermore, in a separate statement, Telefonica announced that as well as selling 8.24% of Telecom Italia to Vivendi, it has also agreed to sell its remaining 6.48% stake to an unnamed financial institution for just over €1 billion. The transaction is due to close by the end of this week.
