Vivendi closes Maroc Telecom sale to Etisalat

PARIS (The Deal) -- The ambition of France's Vivendi to become a pure-play media group edged closer to realization with announcements that it had completed a 4.14 billion euro ($5.7 billion) sale of its majority stake in Maroc Telecom and that a 17 billion euro deal for its French mobile operation was on target to complete by year-end.

Vivendi said Wednesday, May 14, it had completed the sale of 53% of Maroc Telecom to to Abu Dhabi-listed Emirates Telecommunications Corp., known as Etisalat, noting that adjustments meant that the deal closed under the 4.2 billion euro price announced in November.

"A new chapter is being written today by Vivendi as we aim to grow in media and content," Vivendi Chairman Jean-Rene Fourtou said in a statement.

The finalization of the Maroc Telecom deal came a day after Numericable SA said that it was on track to complete the acquisition of Vivendi's Societe Francaise de Radiotelephone SA by the end of the year. Numericable, and its backer Altice SA, agreed last month to buy SFR, seeing off competition from a consortium led by Bouygues SA and fending off opposition from the French government.

Numericable is in talks with competition authorities and expects to receive approval for the acquisition in the third or fourth quarter of this year. "It's too early to say whether they'll respond in October or at year-end," Numericable COO Jerome Yomtov told a conference call on Tuesday.

Vivendi said in April that the sale of SFR would result in a payment of 13.5 billion euros in cash, a potential 750 million euros in performance-related payments and leave it with a 20% stake in a merged SFR and Numericable.

Vivendi has sold or agreed to sell more than $32 billion of assets since 2012, when Fourtou announced plans to focus the business on its media operations and raise cash to pay its debt down to 6.5 billion euros from 17.4 billion euros. Vivendi has already paid down some of its loans following the $8.2 billion sale of a 49.1% stake in games maker Activision Blizzard Inc. in October, and had about 11 billion euros of debt at year-end. Vivendi has promised to return 5 billion euros to shareholders by 2015.

Following the SFR sale, Vivendi will own French pay-TV operation Canal Plus, music label Universal Music Group Inc. and Brazlian telecom GVT, which remains with the group after a failed sales process.

Standard & Poor's Ratings Services last month revised the outlook on Vivendi's BBB credit rating from negative to stable, noting that increased business risk due to its more concentrated asset base was offset by its lower indebtedness and a probable net cash position of 5 billion euros after the sale of SFR.

For Etisalat, buying Maroc Telecom adds four countries -- Morocco, Mauritania, Burkina Faso and Mali - to Etisalat's existing Middle Eastern, African and Asian markets and reflects a wider international expansion push. The closing of the deal comes about 10 months after the two companies entered exclusive talks.

Vivendi shares traded Wednesday at 18.99 euros, up less than 1% on their Tuesday close. Etisalat shares in Abu Dhabi were down marginally. Marco Telecom, which is traded in Casablanca and Paris, was little changed.

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