| BRASILIA, Sept 3
BRASILIA, Sept 3 Brazil's antitrust watchdog
Cade could analyze Telefonica SA's plan to purchase
smaller rival GVT SA jointly with a proposal to exit Telecom
Italia SpA, depending on how the deals are presented to
regulators, the agency's president said on Wednesday.
Telefonica this week signaled that it will pull out from
Telecom Italia once it completes the acquisition of GVT.
Brasilia-based Cade ordered Telefonica in December to exit
Telecom Italia, which controls Brazil's No. 2 wireless
carrier, to ease competition concerns in Brazil.
Regulators are ready to analyze the Telefonica-GVT deal once
it is filed, Cade president Vinícius Carvalho said. Different
arrangements for the deal, including a potential swap of Telecom
Italia shares between Telefonica and France's Vivendi SA
, which owns GVT, could be analyzed by regulators.
"If in the middle of the transaction, there is the Telecom
Italia stake that could be traded between Telefonica and
Vivendi, it will be analyzed as part of the entire deal,"
For years, the ties between Telefonica, which controls
Brazil's No. 1 mobile carrier, and Telecom Italia sparked
regulatory unease in Brazil. Telefonica has taken steps to cut
its Telecom Italia stake since Cade's December ruling as a way
to preserve its leadership in Brazil - Telefonica's
second-largest market behind Spain in terms of cash generation.
The Madrid-based company offered Vivendi an 8.3 percent
voting stake in the Italian company as part of $9.8 billion bid
for GVT. The companies will discuss the deal for the next three
Telefonica controls wireless carrier Vivo, which directly
competes against Telecom Italia's local unit TIM Participações
SA. Cade gave Telefonica 18 months to either sell its
interest in Telecom Italia or seek a new partner for Vivo.
Vivendi shares fell 1 percent in Paris to 19.71 euros, while
telecom Italia shed 0.2 percent to 0.8605 euros on Wednesday.
Telefonica climbed 1.2 percent to 12.160 euros.
(Additional reporting and writing by Guillermo Parra-Bernal;
Editing by Nick Zieminski)