A full merger between incumbent Portugal Telecom and Brazilian telco Oi could be possible within three years, according to local media.
The Portuguese newspaper Diario Economico reported that negotiations between the two companies had taken place behind…
A full merger between incumbent Portugal Telecom and Brazilian telco Oi could be possible within three years, according to local media.
The Portuguese newspaper Diario Economico reported that negotiations between the two companies had taken place behind the scenes.
Catalyst for the discussions is reportedly the news that PT will abolish the special rights attached to golden shares held by the government in the company later this month.
The special rights currently give the state the ability to veto strategic decisions by the company.
The European Court of Justice ruled in 2010 that golden shares held by the Portuguese state in various companies are a violation of the EU’s free movement of capital requirements.
In June 2010, the government used its golden share veto rights to block Portugal Telecom’s sale of its stake in Vivo to Telefonica, despite the deal having the support of a majority of shareholders.
PT and Telefonica agreed on the Vivo transaction just weeks after the ECJ ruling that the Portuguese state’s golden rights were unlawful.
In March 2011, Portugal Telecom acquired a direct and indirect stake of 25.28% stake in Oi for R$8.32bn (US$5bn).
Oi also acquired a 3% stake of Portugal Telecom in March. Under the terms of the strategic agreement between the companies, Oi is due to acquire a 10% stake in Portugal Telecom.
Oi and Portugal Telecom did not reply to questions before the press deadline.
