Portugal Telecom Signs Deal For Minority Stake In Brazil's Oi

Date : 01/26/2011 @ 4:59AM
Source : Dow Jones News
Stock : Tele Norte Leste Participacoes S.A. Common Stock (TNE)
Quote : 10.99  0.0 (0.00%) @ 2:05AM

Portugal Telecom Signs Deal For Minority Stake In Brazil's Oi

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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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