Mobile phone giant Telefonica targets Brazil

O2 owner Telefonica is dialling into the lucrative Brazilian internet market with a €6.7 billion (£5.3 billion) swoop on Global Village Telecom.

GVT is Brazil’s leading high-speed internet and connected-television provider and owned by France’s Vivendi.

The bid is said to comprise 60% cash and a 12% stake for Vivendi in Telefonica’s Brazilian mobiles operator Vivo.

The Spanish telecoms giant is also said to be considering offering the French group an 8.3% stake in its Telecom Italia business.

If Telefonica’s bid was successful it would plan to merge GVT with its Telefonica Brazil arm in a bid to expand into the South American country to offset slower growth in its home market in Europe.

The Spanish giant has a 74% stake in Telefonica Brazil and under the terms of the proposed deal with Vivendi this would reduce to 62%.

Vivendi said its supervisory board will “consider the Telefonica offer in the best interests of its shareholders and the GVT employees”. Vivendi has previously announced a sell-off of $30 billion of businesses and assets.