Telefônica Brasil to acquire 50% of FiBrasil from CDPQ for R$850m
Investing.com -- Telefônica Brasil (B3:VIVT3), also known as Vivo, has agreed to acquire 50% of FiBrasil from Caisse de dépôt et placement du Québec (CDPQ) for R$850 million, the company announced Thursday.
The acquisition, which includes a subscription bonus issued by FiBrasil, will increase Vivo’s stake in the fiber network operator from 25.01% to 75.01%, with Telefónica Infra holding the remaining 24.99%.
FiBrasil operates a neutral, independent wholesale fiber network with a presence in 151 cities. The company has expanded its fiber-to-the-home (FTTH) coverage from 1.6 million homes passed in 2021 to 4.6 million currently.
The purchase price represents approximately 2 times FiBrasil’s book value. As of the end of 2024, FiBrasil reported total assets of R$2,026 million and liabilities of R$1,158 million, with equity of R$868 million.
FiBrasil generated revenue of R$392 million in 2024, up from R$289 million in 2023, though it posted a net loss of R$8 million in 2024, improved from a R$39 million loss in 2023.
Most of FiBrasil’s revenue comes from Vivo, with related party transactions totaling R$386 million in 2024.
By acquiring CDPQ’s stake, Vivo will internalize nearly R$0.4 billion in costs that represented the majority of FiBrasil’s 2024 revenue. This is expected to increase Vivo’s consolidated EBITDA by approximately 1.7% based on 2024 figures.
Vivo continues to strengthen its position in the Brazilian broadband market, having exceeded its target of 29 million FTTH homes passed, reaching 29.6 million as of Q1, which includes FiBrasil’s 4.6 million homes.
The transaction will increase Vivo’s net debt by R$850 million plus FiBrasil’s net debt, but the internalization of costs is expected to improve margins.
Telefônica Brasil currently has a price target of R$36.00, representing a 14% upside from its current price of R$31.68.
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