LetterOne moves on Brazilian mobile consolidation

LetterOne moves on Brazilian mobile consolidation

26 OCT 2015

LetterOne, the private equity firm backed by Russian billionaire Mikhail Fridman and his Russian partners, could invest $4 billion into debt-laden Oi, if it merges with rival TIM Participacoes.

Fixed-line giant Oi, which also has a smaller mobile business, said its adviser BTG Pactual received a letter on Friday (23 October) containing a proposal from LetterOne.

The private-equity fund wants exclusive negotiations with Oi, as it eyes a potential combination with Telecom Italia’s local unit, TIM Participacoes. If the consolidation process proved successful then LetterOne would invest a hefty $4 billion in Oi.

The private equity firm holds a 48 per cent stake in VimpelCom and 14 per cent share in Turkecell, indicating it is a heavyweight player. In addition, the firm has separate plans to invest $16 billion in the US and Europe telecoms and technology business.

Oi said it will carefully evaluate LetterOne’s proposal. Oi and TIM Participacoes are two of Brazil’s four leading operators. The other two are America Movil-backed Claro and Telefonica’s Vivo.

Consolidation of the country’s mobile market has been mooted for some time. Indeed Oi has been linked last year to a joint bid for Telecom Italia’s Brazilian arm TIM, in partnership with America Movil and Telefonica.

Author

Richard Handford

Richard is the editor of Mobile World Live’s money channel and a contributor to the daily news service. He is an experienced technology and business journalist who previously worked as a freelancer for many publications over the last decade including...

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