Portugal Telecom Signs Deal For Minority Stake In Brazil's Oi
January 26 2011 - 4:59AM
Dow Jones News
Portugal Telecom SGPS SA (PT) said Wednesday it has signed a
final deal to acquire a minority stake in Brazilian phone giant Oi
(TNE) for 8.32 billion reais ($5 billion).
Under the deal, originally announced in July last year, Portugal
Telecom will own at least 22.38% of Oi. The Portuguese company will
also have a 12.1% stake in Telemar Participacoes, Oi's holding
company, it said in a statement.
The deal is expected to close by the end of March.
Oi plans to acquire a stake of up to 10% in PT.
The operation is linked with a deal between Portugal Telecom and
Telefonica SA (TEF), under which PT sold its stake in Brazil's
mobile operator Vivo Participacoes SA (VIV) to Telefonica for
EUR7.5 billion last year. Some of the proceeds will be used to buy
Oi's stake and allow Portugal Telecom to return to Brazil.
The country is a key market for both Telefonica and Portugal
Telecom as they face declining revenue in their mature home markets
and are suffering the lingering impact of a severe recession.
"With the signing of these agreements in connection with this
strategic investment, PT will continue to benefit from scale and
geographic diversification in high-growth markets," it said in the
statement, adding that it expects to be able to use its own
experience in developing new services to customers to improve Oi's
financial performance.
-By Patricia Kowsmann, Dow Jones Newswires; +44(0)75-0076-2189;
patricia.kowsmann@dowjones.com
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