Law change to allow BrT merger may take two months, paper says

4 Jun 2008

Brazil’s president Luiz Inacio Lula da Silva could take up to two months to consider his final decision on making the necessary legislative changes to allow Telemar Participacoes (Oi) to buy rival operator Brasil Telecom Participacoes (BrT), Estado de S. Paulo reports citing Communications Minister Helio Costa as saying. The anticipated delay will not, however, adversely effect the takeover deal which has a December deadline for completion – with a provision to extend that date until 25 April 2009, the newspaper said, citing the minister.

Last week, Oi informed the country’s antitrust body Cade that there was no reason to object to its acquisition of BrT because it plans to keep the two companies as separate entities pending an amendment in the telecoms law allowing it to merge them. Under current rules, fixed line carriers operating in different regions of the country are not allowed to merge. BNamericas says that as part of standard protocols in Brazil, it is usual for Cade to ask the companies involved in a merger to sign a formal agreement committing to carry on separate operations until the acquisition is officially approved. ‘The deal will not generate any type of financial concentration until the change in the regulatory framework by Anatel. There will only be antitrust concerns after Anatel’s analysis, said the report Oi sent to Cade, according to local newspaper Valor Economico.