Telefonica-controlled Brazilian operator Telecomunicacoes de Sao Paulo (Telesp) has reportedly secured promises for up to BRL30 billion (USD17 billion) in financing as it looks to take control of the country’s leading cellular operator by subscribers, Vivo Participacoes. Reuters cites sources with direct knowledge of the situation as saying up to five local banks are offering the funds to Telesp in the wake of Telefonica’s announcement last month that it wants to buy out Portugal Telecom’s (PT’s) 50% stake in their Vivo joint venture. The Spanish group originally offered USD7.8 billion for PT’s holding, but on 2 June news emerged that Telefonica had sweetened the bid to around USD8.05 billion. A Telesp-Vivo merger would create the largest telecommunications group in Brazil. It is understood the high level of funds committed – i.e. twice the size of the takeover itself – are part of the banks’ efforts to win merger and acquisition deals by financing them. Brazilian buyouts may reach a three-year high in 2010, according to a recent announcement by the industry’s lobbying group. However, Telesp has released a statement saying it has not ‘made a single effort to raise any funding with any financial institutions’ to win control of Vivo. For its part, Vivo has so far declined to comment.