Portugal Telecom SGPS SA (PT) confirmed Wednesday it would sell its stake in Brazil's Vivo Participacoes SA (VIV) to Telefonica SA (TEF) for EUR7.5 billion and use some of the proceeds to buy a 22.4% stake in Brazilian telecommunications company Oi (TMAR5.BR), after months of struggle between the two Iberian telecoms.

In a filing to the Portuguese market regulator, PT said it would receive the payment from Telefonica in three segments, the last in October 2011.

Portugal Telecom said it would buy a 22.4% stake in Brazilian telecommunications company Oi (TMAR5.BR) for up to EUR3.7 billion.

Brazil 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.

Company Web site: http://www.telefonica.com

-By Jason Sinclair, Dow Jones Newswires, 34 913958127, jason.sinclair@dowjones.com
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