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In the emerging markets, a key to growth is mobile. And, this is revving up M&A activity for the major operators, who are trying to grab marketshare.
This is certainly the case with Vivendi. Recently, the company's chief -- Jean-Bernard Levy -- said he has a credit line of close to $9 billion to do deals.
Well, he hasn't wasted much time. Late yesterday, Vivendi announced a buyout bid for GVT SA, which is a fixed-line phone company in Brazil. The transaction comes to about $3 billion (or a 16% premium to the current stock price).
As with any complex deal, there could be problems. For example, GVT may get a rival bid or there may be legal defenses. But, for the most part, it looks like this deal has a good chance of getting done.
Most importantly, GVT would provide Vivendi a nice footprint in Brazil. The company is growing nicely and is profitable.
Keep in mind that this deal may be a prelude to another. That is, Vivendi owns a 20% stake in NBC Universal. The remaining equity is owned by General Electric (NYSE: GE).
In other words, Vivendi could unload the unit to raise a big chunk of cash, which would allow even more dealmaking in emerging markets.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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