Brazilian competition regulator Cade has approved the planned merger of local telco Oi and Portugal Telecom.
In an announcement in Brazil’s official gazette, Cade said it had cleared the deal “without restrictions”.
The merger was agreed in…
Brazilian competition regulator Cade has approved the planned merger of local telco Oi and Portugal Telecom.
In an announcement in Brazil’s official gazette, Cade said it had cleared the deal “without restrictions”.
The merger was agreed in October and not unexpected given PT is already Oi’s largest shareholder and the companies have been working closely together. The operators aim to complete the deal in H1 2014, following approvals from shareholders and regulators.
However, Brazil’s securities watchdog, CVM, has reportedly sided with Oi’s minority shareholders in a dispute over the terms of a share issuance integral to the deal.
CVM has said Oi’s controlling ownership group, Telemar Participacoes, is not allowed to participate in calculating the value of some of Oi’s assets, according to a preliminary decision document obtained by Bloomberg from minority shareholder Tempo Capital.
Oi and PT were set to use the value of the assets approved by their biggest shareholders to work out how shares in the newly-combined company, provisionally known as CorpCo, would be distributed.
If the CVM decision is upheld, the companies will have to sweeten their offer to minority investors to get them on side. Currently Telemar is set to get its debts paid off while smaller investors’ stakes will be diluted through a new share issue to Portugal Telecom.
The deal needs the approval of Brazilian and Portuguese Antitrust Authorities, telecom regulators Anatel and Anacom, and securities and exchange commissions in Brazil, Portugal and the US.
