America Movil, Oi SA to hold talks over potential TIM Brasil bid

9 Sep 2014

The Mexican telecoms holding group of the billionaire Carlos Slim, America Movil (AM), is planning to hold talks with Brazilian-owned telco Oi SA (Oi) concerning a possible joint bid for fellow operator TIM Participacoes (TIM Brasil), Reuters reports AM’s chief financial officer as saying. In an email, Carlos Garcia Moreno said: ‘Oi presented an offer for TIM and has said that they could include other operators,’ adding, ‘We have decided in principle to explore this option. We will be talking with them.’ Earlier, Garcia Moreno told Bloomberg that financing a deal for TIM Brasil – the country’s second-biggest wireless company by subscribers – would not be a problem, although AM would likely incur some debt.

In August this year, TeleGeography’s CommsUpdate that Oi was reviewing its options to acquire a USD8 billion stake in TIM Brasil as consolidation in the LatAm market ratchets up another notch. At the time, Oi instructed BTG Pactual to review its options ‘with the purpose of enabling a viable proposal for the acquisition of the shares of TIM’ indirectly held by Telecom Italia (TI), which owns about 67% of TIM Brasil, which has a market value of more than USD12 billion. Rio De Janeiro-based Oi has launched the review as rivals Telefonica Brasil (Vivo) and TIM Brasil seek to enlarge their own circle through the purchase of broadband provider Global Village Telecom (GVT) from French media group Vivendi. Oi is obviously keen not to be dwarfed by its rivals’ acquisition efforts and sees a bid for TIM – Brazil’s second largest cellular operator – as a means to achieve this. Oi, Telefonica and AM have been discussing a potential joint bid for TIM Brasil since late last year, several sources told Reuters earlier this year. However, any move to consolidate the mobile market would face intense scrutiny from antitrust regulators, which have expressed concern over any reduction in sector competition. The development comes as Portugal Telecom (PT) announced that its shareholders have voted to accept the revised terms of a merger with Oi SA, under which PT will have a smaller stake in their new joint company CorpCo (see separate CommsUpdate story for full details).

Brazil, America Movil (AM), Oi, TIM Brasil