Vivendi to sell Brazil unit to Telefonica for $9.83 billion by Geoffrey Smith @FortuneMagazine August 28, 2014, 11:15 AM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons Vivendi SA VIVEF , the French company behind Universal Music, said Thursday it would start exclusive talks to sell its Brazilian mobile phone unit GVT to Spain’s Telefonica SA for $9.83 billion. The move will essentially complete Vivendi’s exit from the telecoms business and raise cash for it to invest in the media and content business, which it has identified as its future priorities. It had already sold its French mobile network operator, SFR, for $23 billion in April, and completed the sale of its Moroccan operations in May. At the same time, the deal will also strengthen Telefonca’s dominance in Brazil, where it already owns Vivo, the largest provider of fixed and mobile telecoms networks. Vivendi had received two bids after putting GVT up for sale, with Telefonica’s shading one from Telecom Italia SpA that valued it at only $9.2 billion (and also included a smaller cash component). Both bidders are former national champions with their roots in the fixed-line telecoms business, anxious to raise exposure to faster-growing emerging markets and escape stagnation in their domestic ones. Vivendi will still keep some indirect exposure to the Brazilian market, saying the agreement would allow it to develop joint projects with Telefonica in content and media. GVT offers internet and a small but fast-growing Pay-TV product, as well as operating a mobile phone network. The sale, while freeing up cash for new investments such as a new TV channel aimed at Francophone Africa, will also go to further reduce Vivendi’s once-enormous debt pile. Asset disposals have already allowed it to cut net financial debt to €7.9 billion as of the end of the first half, from €17.4 billion a year ago. Gains on those disposals also pumped up net profit by 84% to €1.92 billion, despite a 3.5% drop in revenue to €5.55 billion. At its Universal unit, revenue rose 3% on the year, adjusted for exchange-rate swings, thanks in good measure to the success of the soundtrack to Disney’s “Frozen” and carryover sales from Lorde, Katy Perry and Avicii. The $409 million proceeds of its 13% stake in headphones maker Beats to Apple Inc. will be booked in the second half. Shares in both Vivendi and Telefonica fell Thursday, although both outperformed their local indexes, which were under heavy pressure due to the escalating crisis in Ukraine.