Brazil's Oi telecommunications company announced will pay 5.9 billion reals (US$3.5 billion, €2.2 billion) for control of the nation's No. 3 fixed line carrier in a deal supported by the government to spur competition, an Associated Press report said.
The deal will create a huge fixed line operator spanning most of Latin America's most populous country, and will give the combined company about 17% of Brazil's fast-growing cell phone market, the report said.
Controlling shareholders of Oi, whose official name is Tele Norte Leste Participacoes, announced the long-awaited deal in a filing submitted to Brazilian securities regulators.
It must still be approved by regulators, but Brazilian government officials have repeatedly stated they support the combination because it will increase competition for the two other big national players: Spain's Telefonica and Mexico's America Movil, the latter owned by Mexican billionaire Carlos Slim.
Oi is controlled by a group of Brazilian investment funds, and Brasil Telecom is controlled by Brazilian investment funds and Citigroup.
The Associated Press report also quoted Communications Minister Helio Costa as saying that the combined company would be a dominant player in the fast-growing Brazilian market while also operating in nations like Colombia, Peru and Venezuela.