Phone Giants close to Joint Bid for Telecom Italia’s Brazil Unit
América Móvil of Mexico, Oi of Brazil and Telefónica of Spain are coming together on a joint offer to buy Telecom Italia’s Brazil operations, TIM Participações, a person with close knowledge of the negotiations said on Tuesday.
TIM’s market value is just over $14 billion and any offer would be expected to involve a premium.
América Móvil’s chief financial officer said on Monday that it was in talks with Oi over a possible joint offer, Bloomberg News reported. The person with knowledge of the negotiations said that Telefónica would also participate.
América Móvil could easily raise the cash to participate an acquisition of TIM Participações, but Oi would be expected to finance the offer by selling noncore assets, like fiber optic networks, cell phone towers and its investments in Africa. Telefónica, meanwhile, could leverage its current Brazil operations.
“Four wireless operators is too much for the Brazilian market,” the person with knowledge of the negotiations said.
As a result, Mr. Pardallas said, it was possible that antitrust authorities would block an acquisition, even if Telecom Italia agreed to terms.
Telecom Italia lost its investment grade rating last year. Selling TIM would help Telecom Italia regain its financial footing, but it might also leave the Italian company without many growth opportunities.
Source: NYT
