Altice signed a definitive agreement with Brazil-based Oi to buy the Portuguese assets of Portugal Telecom (PT Portugal) for €7.4 billion ($9.1 billion) on a cash and debt-free basis.
The company announced the deal after Oi confirmed that its board had approved the sale of all shares in PT Portugal to Altice Portugal (Altice PT). The move effectively unravels the merger agreed a year ago between Oi and PT to create a transatlantic telecoms operator, and comes just over a week after Altice and Oi entered into exclusive negotiations.
However, the sale is still dependent on approval by the shareholders of Portugal Telecom SGPS, the holding company that owns a 25.6 per cent stake in the operator created by the merger between Oi with Portugal Telecom.
A potential complication to the takeover is a deal sought by Isabel dos Santos, the daughter of Angola's president. Last month, dos Santos made a €1.2 billion bid for Portugal Telecom SGPS. However, Portugal Telecom SGPS issued a statement on Wednesday that said this offer was too low and did not reflect the company's true value.
Once Altice receives the final corporate approvals and regulatory clearance it will take over the existing business of PT Portugal outside of Africa. The deal excludes PT Portugal's Rio Forte debt securities, Oi treasury shares, and PT Portugal financing vehicles.
Altice has already agreed a partnership with Portuguese postal services provider CTT to develop and offer joint services in Portugal, subject to Altice's successful acquisition of PT Portugal.
For Oi, the sale of the Portuguese assets will enable it to focus on its domestic market.
"With this step concluded, Oi continues its objective of reinforcing its financial capacity in order to maintain its objective of leading the consolidation movement in the Brazilian telecommunications market," the company said in a statement.
The operator has already expressed interest in buying Telecom Italia's unit TIM Participacoes, while in turn Telecom Italia's board has given management clearance to explore a tie-up between TIM Participacoes and Oi.
For its part, Altice has made no secret of the fact that it is looking at opportunities in every country where it is present and is a strong advocate of fixed and mobile convergence as well as in-market consolidation. In Portugal, the company already operates Cabovisao; the addition of mobile and fixed assets from PT, which provides converged offerings under the MEO brand, will complement its existing cable services.
Altice recently completed the acquisition of France-based SFR via cable subsidiary Numericable, creating a new fixed and mobile powerhouse on the French market. The company has also expressed interest in buying rival French operator Bouygues Telecom.
For more:
- see this Oi statement
- see this Portugal Telecom SGPS statement
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