Telecom Italia cleared to pursue deal with Brazil's Oi

Telecom Italia's board on Friday gave clearance to the company's management to explore a tie-up between TIM Participacoes and Brazilian rival Oi, while also approving the sale of the company's towers in Brazil to American Tower Group.

The operator's management will now give serious consideration to a possible integration of TIM Participacoes--in which Telecom Italia holds a controlling 66.5 per cent stake--with Oi to stem declines in revenues in the country.

Telecom Italia's Brazilian revenues dipped 12.6 per cent year-on-year in the nine months to end September. The company is keen to explore a deal with Oi after losing out to Telefónica in a bid to acquire local cable operator Global Village Telecom (GVT)--a tie-up that would have enabled TIM Participacoes to offer fixed and mobile services under its TIM Brasil brand.

In a statement, Telecom Italia explained that any proposed deal with Oi would still require board approval. That approval seems set to be reliant on a close examination of Oi's finances and on TIM Participacoes taking a controlling stake in any merged company, Bloomberg reported previously.

Telecom Italia also confirmed that the sale of its mobile towers in Brazil has been approved. The company will offload 6,481 Brazilian towers to American Tower Group for BRL3 billion (€961 million/$1.1 billion).

Furthermore, the Italian operator's management also used the board meeting to confirm it has approached venture capital firm F2i regarding a potential take-over of Italian fibre operator Metroweb.

Bosses say taking a controlling stake in Metroweb would allow Telecom Italia to quickly create a plan to deploy a nationwide, next-generation, fibre optic network that would help Italy meet the goals of the EU's Digital Agenda: namely, to offer fixed data rates of 100 Mbps and above.

For more:
- see Telecom Italia's statement
- view this Bloomberg report

Related Articles:
Telecom Italia on brink of Brazilian progress
Telecom Italia denies capital increase plan to finance Brazil deal
Telecom Italia heralds 'signs of change' despite fall in core profit
Report: Telecom Italia values TIM Brasil stake at €13B
Telefónica cuts stake in Telecom Italia through bond sale

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