BRASILIA (Reuters) - Spain's Telefonica SA (MC:TEF) has resolved the antitrust concerns it faced in Brazil by getting rid of its Telecom Italia stake in a deal finalised on Friday to acquire local broadband provider GVT, according to two government sources.
Telefonica agreed to buy GVT from France's Vivendi SA (PA:VIV) for 7.2 billion euros (5.70 billion pounds) in cash and shares, including its remaining 5.7 percent stake in Telecom Italia SpA (MI:TLIT).
By exiting Telecom Italia, whose local wireless carrier TIM Participações SA (SA:TIMP3) competes with Telefonica Brasil SA (SA:VIVT4), the Spanish company has complied with a December ruling by Brazilian antitrust regulator Cade, the two sources said, requesting anonymity due to ongoing deliberations.
Regulators' focus will now be on whether Vivendi's minority stakes in Telefonica and Telecom Italia pose any risk to healthy competition between their Brazilian units, the sources said.
"In theory, Telefonica has resolved its problem, but the concern becomes Vivendi, albeit to a lesser degree," said one of the government sources. "The situation is still not so clear. The concern is there, but it's hard to be sure about any potential restrictions."
The second source said regulators would not necessarily block the deal, but they could require measures to keep Vivendi from weighing in on decisions about the Brazilian market.
(Reporting by Leonardo Goy; Writing by Brad Haynes; Editing by Lisa Shumaker)