Telefonica denies TIM Brasil break-up plan

Telefonica denies TIM Brasil break-up plan

06 JAN 2014

Telefonica denied reports in the Italian press that it’s hatching a plan to make a joint offer with local rivals for Telecom Italia’s Brazil unit.

According to Il Sole 24 Ore, quoting “reliable sources”, Telefonica was close to setting up a financial investment vehicle with Claro – owned by Carlos Slim’s America Movil – and Oi, Brazil’s fourth-largest operator.

TIM Brasil, which runs TIM – the second-largest operator in Brazil behind Telefonica’s Vivo – would then be broken up, according to the report, and assets handed over to Claro and Oi.

“Telefonica would like to clarify that it is not part of any such vehicle and it has no details of any kind on any such potential transaction to disclose to the public for market evaluation,” the firm said in a statement to Spain’s stock market regulator, quoted by Reuters.

The Spanish and Latin American giant added that no contact had been made with Cade, Brazil’s trustbuster, over such a deal.

Telefonica has been under pressure to loosen its grip on Brazil’s mobile market after hiking up its stake in Telco, which controls the Italian incumbent.

Cade ruled in December that Telefonica must either exit its stakeholdings in TIM Brasil or get a new partner for its Vivo mobile subsidiary.

Telecom Italia, however, has always insisted that Telecom Brasil is a strategic asset and would not be willing to sell (even though the price of Telecom Italia’s shares shot up after the Il Sole 24 Ore report on 3 January).

According to Bloomberg sources, Telecom Italia directors are now attempting to make it more difficult for Telefonica to sell its Brazilian business unit.

The directors, backed by CEO Marco Patuano, are reportedly proposing a motion that would require any potential offer for TIM Brasil to be scrutinised by a special committee,

Telecom Italia’s board is set to vote on the motion in a 16 January, according to unnamed sources.

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Ken Wieland

Ken has been part of the MWC Mobile World Daily editorial team for the last three years, and is now contributing regularly to Mobile World Live. He has been a telecoms journalist for over 15 years, which includes eight...More

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