Brazilian telecommunications company Algar Telecom announced an agreement to purchase the compatriot telecommunications provider Vogel Telecom for up to BRL 600 million (USD114.5 million).
With the acquisition, made through its subsidiary Algar Solucoes em TIC, the company will expand its network to more than 110,000 km of fibre optics and 3,400 corporate clients.
The takeover will involve the acquisition of shares representing at least 85.2% of Vogel (potentially rising to a 100% stake).
Vogel Telecom is a company 100% dedicated to the corporate and wholesale market, which offers high capacity connectivity services. It is present in 150 cities across 13 states and the Distrito Federal and presides over a fibre-optic network that spans 27,000km.
"The acquisition is in line with Algar Telecom's growth strategy, which encompasses its geographical expansion through the offer of integrated Telecom and IT solutions with a focus on the B2B segment, which already represents more than 60% of its revenues", Algar said in a statement.
According to Algar, the acquired network is complementary to its own in the states of São Paulo, Rio de Janeiro, Minas Gerais, Paraná, Santa Catarina, and Rio Grande do Sul.
The transaction is subject to approval from the National Telecommunications Agency (Agencia Nacional de Telecomunicacoes, Anatel) and the Administrative Council for Economic Defence (Conselho Administrativo de Defesa Economica, CADE). In addition, the deal requires the non-exercise of pre-emptive rights by Vogel’s current minority shareholders.