Telefonica Takes Control Of Brazil's Vivo After EUR4.5 Billion Payment
September 27 2010 - 2:45PM
Dow Jones News
Spain's Telefonica SA (TEF) on Monday said it has taken control
of Brazilian mobile telephone company Vivo Participacoes SA (VIV)
after making an initial EUR4.5 billion payment to its partner in
the joint venture, Portugal Telecom (PT).
The acquisition marks the latest phase of consolidation in the
Brazilian telecommunications market, which will now see PT use the
proceeds to buy a 22.4% stake in rival Brazilian telecommunications
company Oi (TMAR5.BR).
In a statement, Telefonica said that as a result of the payment,
it has taken control of Portugal Telecom's 50% of Brasilcel, the
holding company that in turn owns about 60% of Vivo. Telefonica
will pay the remaining EUR3 billion in a number of installments
over the next year, starting with a payment of the first payment of
EUR1 billion due in December and the final EUR2 billion due in
October 2011.
Telefonica confirmed it will now prepare to launch a tender
offer to buy up all voting shares in Vivo, for a price equal to 80%
of the price paid for each voting share of Vivo owned by
Brasilcel.
Brazil's telecommunications regulator, Anatel, had approved
Telefonica's purchase of Portugal Telecom's stake in Vivo on
Thursday, after it concluded that the purchase only involves a
change in shareholders and doesn't affect competition in the
market.
-By Matthew Cowley, Dow Jones Newswires; +55 11 3544 7082;
matthew.cowley@dowjones.com
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