Brasilcel to expand customer base with acquisition of TCO

17 Jan 2003

Brasilcel, the new mobile joint venture between Spain’s Telefónica Móviles and Portugal Telecom, has announced plans to acquire 100% of Brasilia-based cellco Tele Centro Oeste (TCO). The purchase, which is currently awaiting approval from the regulator Anatel, will add around three million subscribers to Brasilcel’s managed customer base, taking it to 16.8 million. The holding company plans to use its largest operator, Telesp Celular (TCP), to carry out the acquisition, as it claims the operator’s shares are the most attractive of all its subsidiaries. Brasilcel plans to purchase BRL1.4 billion (USD420 million) worth of common stock in TCO from Fixcel, giving it a stake of 61.1% in the cellco, before completing the transaction – assuming TCO’s BRL1 billion debt and paying BRL260 million in cash – over a period of 12-24 months. It will then organise a public offering to purchase remaining common stock held on the market and convert its stock to TCP shares. According to Brasilcel’s chief executive, Francisco Padilha, the transaction could be completed by the end of this year.