Carlos Slim’s America Movil intends to enter talks with Brazilian telco Oi about making a joint bid for the country’s number two mobile operator TIM Brasil, controlled by Telecom Italia (TI).
The Mexican telco’s CFO Carlos Garcia Moreno told…
Carlos Slim’s America Movil intends to enter talks with Brazilian telco Oi about making a joint bid for the country’s number two mobile operator TIM Brasil, controlled by Telecom Italia (TI).
The Mexican telco’s CFO Carlos Garcia Moreno told Bloomberg the company is interested in talking to Oi to discuss the offer further and “explore the opportunity”. However, he stressed that the companies have not reached a formal agreement on the matter.
Moreno was quoted as saying he does not think financing such a transaction would be a problem, although he noted that America Movil, which owns Brazil’s third-largest mobile operator Claro, would probably have to take on some debt.
Oi has hired BTG Pactual to advise it on a potential acquisition of TIM. It has already reportedly discussed a potential joint bid with both America Movil and Telefonica, owner of Brazil’s largest mobile operator Vivo.
Moreno declined to tell Bloomberg whether any other party is currently involved. However, he said he thinks Oi has discussed the possibility of having others join in, adding that America Movil is willing to consider that option.
It remains unclear whether TI will decide to sell its majority stake in TIM. CEO Marco Patuano has repeatedly stressed that the Brazilian business is a core asset, but said the company is open to options.
While some sector commentators do not expect Brazilian authorities to stand in the way of dividing TIM between the three other existing operators, others have reservations.
Wally Swain, senior vice president at research firm Yankee Group, recently said “[a]ny attempt to take TIM out of the market is bound to meet resistance from competition authorities, the telecom regulator and the cabinet.
“Brazilian government policy is to attract a fifth operator and not permit the market to reduce to three.”
Swain also questioned whether TI would be willing to sell the only part of its business that is still growing.
Meanwhile, UK-based Vodafone is reportedly also considering entering the Brazilian market, with TIM as a preferred target.
