Telecom Italia on brink of Brazilian progress

Telecom Italia is close to announcing a deal to sell the mobile phone towers of its Brazilian business TIM Participacoes to American Tower, as chief executive Marco Patuano also continues to push for a tie-up with Brazilian rival Oi.

The Italian operator is honing in on a tower sale deal worth €900 million ($1.1 million) and could announce the agreement following a board meeting taking place today (Friday), Reuters reported, citing two sources with knowledge of the negotiations.

Patuano first detailed plans to sell off the company's Brazilian towers a year ago, as part of a restructuring plan designed to reduce Telecom Italia's debt and free up funds for network investment, the news agency added.

The CEO will also use the board meeting to seek approval for a merger with Brazilian rival Oi, Bloomberg reported. The news outlet said any such deal would depend on Telecom Italia first being granted access to Oi's books, and also on the Italian operator holding a controlling stake in the merged entity.

Telecom Italia currently holds a 66.5 per cent stake in TIM Participacoes. In September, the company valued its holding at around €13 billion, giving the Brazilian company a total value of around €20 billion.

Brazil has been a key market for Telecom Italia in recent years, amid weakness in its core European markets. However, the operator's revenue in Brazil dipped in the first nine months of 2014, as did the unit's contribution to total group revenue.

Telecom Italia on Monday denied it planned to sell new shares to finance an acquisition in Brazil, following widespread reports of Patuano's desire for a deal with Oi.

The operator is eyeing a tie-up with Oi after losing a bid to acquire Brazilian broadband operator Global Village Telecom (GVT) that would have enabled Telecom Italia to offer fixed and mobile services in Brazil.

For more:
- see this Reuters article
- view this Bloomberg report

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