Telecom Italia (TI) has reportedly decided to wait a few months before advancing merger talks between its Brazilian subsidiary TIM Brasil and Oi, due to the current corporate instability of its potential target.
TI also believes that a tie-up would only…
Telecom Italia (TI) has reportedly decided to wait a few months before advancing merger talks between its Brazilian subsidiary TIM Brasil and Oi, due to the current corporate instability of its potential target.
TI also believes that a tie-up would only be possible after Oi reduces its R$46bn (US$17bn) debt levels and operational expenses, according to a Reuters report citing sources familiar with the matter,
Last month, TI’s management board mandated CEO Marco Patuano to assess the feasibility of a potential combination between TIM, which is the country’s second-largest mobile carrier, and Oi.
TI has reportedly been targeting a 51% stake in the combined entity, which could result in €9bn worth of synergies. A merger with Oi would enable TIM to add fixed-line services to its offering.
However, TI is reportedly in no rush to close a deal with the Brazilian telco, as it first needs a number of reassurances, including that the Brazilian government will renew Oi’s operating licences and remove some service obligations.
Earlier this week, Oi agreed to sell its Portuguese operations to telecoms holding Altice for €7.4bn (US$9.1bn), reportedly to raise cash to take part in a joint bid for TIM in partnership with America Movil and Telefonica.
