Has TIM Brasil been sold to América Móvil?

21 Nov 2006

According to unconfirmed reports from Brazilian daily newspaper Gazeta do Povo, América Móvil, Latin America’s largest wireless operator in terms of subscribers and owner of Brazilian cellco Claro, has signed an agreement to purchase rival operator TIM Participaçoes (TIM Brasil) from Telecom Italia. América Móvil, chaired and majority-owned by Mexican billionaire Carlos Slim Helú, is one of a number of companies that have been stalking the unit for several months.

On 14 November, CommsUpdate reported that TI had received two unsolicited offers for its Brazilian mobile phone operator TIM Brasil, valuing the Italian company’s stake in the venture at up to EUR7 billion (USD9 billion). TI had allowed TIM Brasil’s senior management to consider bids and negotiate the possible sale of the company, currently the number two player in the local cellular market. According to people familiar with the situation, one bid values the stake at between EUR6 billion and EUR7 billion, while the other offer is closer to EUR6 billion. The Italian telecoms firm has 81.2% of TIM Participaçoes’ ordinary shares and 63.7% of the preferred shares, for a total of 69.7% of the share capital. Although TI declined to name the bidders, analysts cited América Móvil, along with Spain’s Telefónica and Brasil Telecom Participaçoes as the potential buyers. Telefónica recently ruled itself out of a bid for the company.