MCI offloads Embratel stake to Telmex for USD360 million

16 Mar 2004

Mexico’s dominant telecoms carrier Telmex is reported to have inked a USD360 million cash deal to acquire MCI (WorldCom)’s 19.26% stake and 51.79% voting shares in Brazilian fixed line telco Embratel Participacoes for USD360 million. The two signed a ‘definitive agreement’ yesterday and now await clearance from both the US bankruptcy court handling the US carrier’s case and regulatory authorities in Brazil. According to BNAmericas, MCI received three bids for the Brazilian telco, with the Mexican operator emerging successful after having offered the ‘best balance of valuation and opportunity for a timely close’. Other submissions were received from three Brazilian incumbents – Brasil Telecom, Telemar and Telesp – which offered USD550 million for the stake, and from Embratel’s employees’ pension fund, Telos. The jilted Brazilian carriers are expected to file a formal complaint to the court handling MCI’s restructuring, saying that their offer should have been accepted ahead of the Telmex bid.