Telecom Italia and Grupo Werthein Group have reached an agreement over how to proceed with partnership Sofora, the holding company of Telecom Argentina.
Telecom Italia’s CEO, Franco Bernabe told investors that his company had come to an agreement with…
Telecom Italia and Grupo Werthein Group have reached an agreement over how to proceed with partnership Sofora, the holding company of Telecom Argentina.
Telecom Italia’s CEO, Franco Bernabe told investors that his company had come to an agreement with the Argentine family office.
Bernabe said: “In the last few days we reached an important agreement with Grupo Werthein, which settles the previous pending legal disputes and redefines the key principles of our partnership.”
TI has had a turbulent time in Argentina, where the government has been lobbying for it to sell its stake in TA to local investors. The government fears that TI’s presence in Argentina is anti-competitive, as the company is 24.7% owned by Spain’s Telefonica, which owns Argentina’s only other telco.
TI’s CEO continued: “The renewed cooperation with Werthein Group will allow us to assess possible alternatives about our future presence in the country with the objective to reach more value from our position in Argentina.”
There was a dispute over an option that was due to expire with Grupo Werthein allowing TI to buy Werthein’s 50% stake in Sofora. Although Bernabe’s statement was highly opaque and open to all manner of interpretation, it could mean that TI will buy Grupo Werthein’s stake – a move that got the green light when the courts overturned an objection by the Argentine telecommunications regulator – or it could mean that TI will try and book profits from selling its own stake onwards and exiting Argentina completely.
When Telecomfinance contacted TI for clarification a spokesperson would neither confirm nor deny either scenario. However, the spokesperson did say that: “TI sees South America as a very important market, with the greatest growth potential of all the markets it operates in.” TI already has an important presence in Brazil and beefing up its position in Argentina could offer a number of cross-border synergies. Analysts are already speculating that given the regulatory changes, the fact that Grupo Werthein would like to exit their investment in Sofora at the right price and that TI has its eyes set on Latin America, it is most likely that TI will buy out Grupo Werthein’s stake in Sofora.
In order to get regulatory approval for a possible acquisition of TA, TI might have to persuade Telefonica to allow it to buy back its shares, or sell them to another party to avoid a conflict of interest.
