America Movil, Telefonica and Oi have made a $13.1 billion bid for TIM, Telecom Italia’s Brazilian unit, according to a local newspaper report cited by Reuters.
Both America Movil and Telefonica have subsidiaries in Brazil – Claro and Vivo respectively – while Oi is the country’s smallest mobile network operator.
According to the report, agreement among the three companies is not fully finalised, but they have agreed in principle to stump up BRL31.5 billion ($13.1 billion). The price, adds the newspaper, includes a 5 per cent premium payout to TIM’s controlling and minority shareholders of TIM.
Under the deal, America Movil would keep 40 per cent of TIM’s business, with Oi taking 28 per cent and Telefonica about 32 per cent. According to the newspaper, Telecom Italia proposed to merge TIM with Oi, but that plan fell through.
Oi reportedly hired BTG Pactual last month to sound out Telefonica and Claro about mounting a joint bid for TIM, according to Bloomberg sources.
The Italian incumbent suffered a setback to its Brazilian ambitions when Vivendi opted to sell GVT, the French conglomerate’s broadband unit in the country, to Telefonica. Telecom Italia had been keen on acquiring GVT to shore up falling voice revenue at TIM.
Telecom Italia CEO Marco Patuano has long maintained that TIM is a strategic asset, which it wouldn’t be willing to sell, but there have been reports his attitude towards a sale has softened (if the price was right).