- Telefónica’s expansive growth areas division furthers its international ambitions by negotiating a tie-up with Vivo on IoT and analytics-based services.
- Deal mirrors an August transaction that gave Telefónica Tech an interest in Vivo’s cloud and security business.
Telefónica Tech, the Group’s growth areas division, continued to expand its sphere of influence to national markets with a deal to buy into the Internet of Things (IoT) and data analytics assets of Brazilian business Telefónica|Vivo.
The somewhat convoluted transaction — announced by Telefônica Brasil, Vivo’s parent, in a stock exchange filing yesterday — will see Telefónica Tech assume a large minority stake in a new local entity called Telefônica Iot, Big Data e Tecnologia do Brasil S.A. (IoTCo Brasil).
Through a parallel equity transfer and share issue, Telefónica IoT & Big Data Tech — one of Telefónica Tech’s two vertical divisions — will take on the 49.99%‑interest in IoTCo Brasil, with Telefônica Brasil retaining a 50.01%‑holding.
IoTCo Brasil will develop as a “Brazilian company dedicated to IoT and big data services and solutions for B2B, aiming to strengthen its positioning with global solutions and platforms, and capture the growth opportunity of this segment”, Telefônica Brasil said.
Vivo had conditions for Tech tie-up
The move appears to value Telefónica Tech’s stake at about BRL 94.96m (£12.25m/€14.42m).
Telefônica Brasil was keen to stress that its Spanish parent had acquired the stake on fair terms, saying IoTCo Brasil’s worth had been appraised by a “specialised independent company”. A Shareholders’ Agreement is now in place to “regulate” its relationship with Telefónica IoT & Big Data Tech, the Brazilian operating business emphasised.
An unnamed number of Vivo employees, contracts, and other assets have been melded into IoTCo Brasil — ostensibly corralling the OB’s big data and IoT activities into the new business.
Another notable aspect is that Vivo will remain “in charge” of IoTCo Brasil’s customer relationships — presumably a mark of overlapping IoT/big data and other enterprise service engagements for important clients. A “commercial intermediation” contract has been agreed and will see Vivo act as IoTCo Brasil’s “exclusive sales channel”, said the OB.
This arrangement — as well as Vivo’s retention of a majority interest in the new business — may well reflect the sensitivities of OBs such as Vivo as Telefónica Tech seeks to centralise IoT, analytics, and other ‘growth’ activities.
Telefônica Brasil said the deal did not require regulatory clearance.
While not a large deal financially, the tie‑up offers up interest as another signal of the highly acquisitive Telefónica Tech division’s ambitions to expand into the operator’s national markets and work its way inside the perimeter of OBs such as Vivo.
The IoT and big data tie‑up essentially mirrors a deal announced in August by Vivo and Telefónica Cybersecurity & Cloud Tech, Telefónica Tech’s other main division. Also based on a straight equity purchase and share issue, this saw the Group assume a 49.99%‑stake in a new entity called Telefônica Cloud e Tecnologia do Brasil, or CloudCo Brasil (Telefónicawatch, #149).