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Press Release -- September 19th, 2014
Source: Telefonica

Telefónica buys GVT and reinforces its leadership in Brazil

– The transaction will generate synergies of at least 4.7 billion euros.
– As part of the agreement, Vivendi acquires 8.3% of Telefónica’s stake in Telecom Italia.

Madrid, 19th of September 2014.- Telefónica S.A. andVivendi signed today the final agreement for the sale of  Global Village Telecom, GVT, to Telefónica.  Both companies agreed on the 29th of August to enter into exclusive negotiations for this transaction, which includes a cash consideration of 4,663 million euros as well as a payment in shares representing 12.0% of the share capital of Telefónica Brasil, after its integration with GVT.

As part of the agreement, Vivendi has accepted Telefónica’s offer to acquire 1,110 million ordinary shares held by Telefónica in Telecom Italia, currently representing 8.3% of Telecom Italia’s voting share capital (corresponding to 5.7% of its total share capital), in exchange of 4.5% of Vivendi’s capital  in the company resulting from the integration between Telefónica Brasil and GVT.

The cash payment for this transaction will be financed via a capital increase at Telefónica Brasil, which Telefónica S.A. will subscribe in proportion to its current stake of 74% in its Brazilian subsidiary and will fund, in turn, via a capital increase.

The operation will generate synergies of at least 4,700 million euros. The new Telefónica Brasil resulting from the integration will enhance its leadership as the country’s integrated telecommunications operator, leader in both the mobile and broadband segments, with national coverage and an increased exposure in the high value segment. The transaction allows Telefónica to enhance its positioning in one of its key markets and improve its growth profile and financial flexibility.

GVT owns a large new generation network with over 10.4 million homes passed in 21 Brazilian states and more than 2.5 million broadband customers, most of them located outside of Sao Paulo.

The final closing of the operation is subject to obtaining the relevant regulatory authorizations.

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