Telecom Italia’s TIM Brasil and Telefonica’s Vivo have jointly contacted Oi’s financial adviser to discuss “initiating negotiations targeting a potential joint acquisition of Oi Group’s mobile business.”
The Brazilian operators confirmed to their shareholders that they had reached out to Bank of America Merrill Lynch about potentially splitting Oi’s assets between them, or buying them “in whole or in part, so that, in the event of the completion of the operation, each of the interested parties will receive a portion of that business.”
TIM Brasil noted that such an arrangement would allow it to compete more effectively by allowing it to improve cost efficiencies and quality of services, facilitating growth. Vivo added that the deal boosting investment opportunities across Brazil’s mobile sector.
Oi acknowledged the interest with a statement that underlined the “market interest” in its mobile unit while noting that no binding agreement had been struck. The beleaguered operator first held talks with Telefonica and Telecom Italia over the sale of its mobile unit in September 2019.
With a debt burden of BRL65.4 billion ($14.1 billion), Oi will be keen to find a buyer that best serves its strategy, and to this end it could be looking into alternative buyers. The bankruptcy request filed by Oi in June 2016 was the largest in Brazil’s history.
