Telefonica wins battle for Brazil’s Global Village Telecom

The owner of O2 has emerged victorious in its €7bn battle to buy a Brazilian broadband giant, outbidding its Italian rival.

Spain’s Telefonica, which owns mobile brand O2, is to buy Brazil’s Global Village Telecom – the South American countries’ leading high-speed internet and connected television provider - from France’s Vivendi.

It upped its stake to beat off competition from Telecom Italia last month and entered exclusive talks. The deal agreed, well ahead of the three-month negotiation period, comprises €4.66bn cash and Telefonica’s stake in Telecom Italia plus a 7.4 per cent holding in its new company, Telefonica Brasil.

Telefonica pushed ahead with the deal to increase its share in the Americas to off-set declines in Europe, and to compete with the likes of Carlos Slim’s Mexican business America Movil.

Telefonica will merge GVT into its Brazilian mobile phone carrier Vivo.

Vivendi is ditching the business as part of a wider $30bn asset disposal to focus on media.