Vivendi, the French communications and content provider, plans to buy Brazilian telecom company GVT in a deal that could be worth more than US$2.9 billion.
Vivendi announced on Tuesday that it has reached an agreement with GTV's controlling shareholders to buy the company.
The controlling shareholders own about 30 percent so the deal must win approval from additional shareholders. Vivendi's offer is conditional on it acquiring a minimum of 51 percent of GVT's shares.
If Vivendi is successful in buying 100 percent of the company it will spend 5.4 billion Brazilian real (US$2.95 billion) on the purchase, the company said.
GVT serves about 2.3 million lines in Brazil, offering voice, broadband and voice-over-IP services.
It earned revenue of about $800 million for the year ending June 30 and grew at a rate of more than 30 percent annually from 2006 to 2008.
It offers its services, including corporate data, in competition with the incumbents in Brazil.
In 2008, Brazil had more than 10 billion broadband Internet users, just over 5 percent of the population, according to the International Telecommunication Union.
The acquisition will help GVT continue to grow rapidly, and Vivendi's content offerings would help GVT with its plans to deliver new services like IPTV, the companies said.
It would also help Vivendi meet one of its objectives: to expand in fast-growing economies, it said.
The deal must still win the approval of GVT's board and regulators, and GVT shareholders must waive an anti-takeover mechanism to allow the acquisition, the companies said.
They expect the offer to be made before the end of the year.