TI could be open to Oi deal; 3Q profit drops 12%

10 Nov 2014

The CEO of Telecom Italia (TI) has said the firm must explore the possibility of merging with or buying the Brazilian telco Grupo Oi, as its own TIM Brasil unit continues to find itself at the centre of speculation over a potential takeover. Marco Patuano told analysts: ‘I think that it is mandatory to explore the possibility of such a big strategic opportunity,’ Reuters reports, though he went on to add: ‘We are not desperate and we don’t want to make a deal at any cost.’ A group of Brazilian rivals led by Oi are thought to be preparing a bid to acquire TIM Brasil and split its assets between them. While TI is hoping to hold onto the cellco, which it sees as a strategic asset, it has said it will sell if the right offer comes along.

Meanwhile, TI reported a 12% decline in net profit for its third quarter to 30 September 2014, to EUR442 million (USD547 million), while overall revenues dropped from EUR5.68 billion to EUR5.42 billion over the same period. The telco had net debt of EUR26.58 billion at the end of September, a fall of EUR235 million on the year-earlier figure. Around 70% of TI’s business comes in its domestic market and the country is struggling to escape a long period of recession, while foreign exchange losses also hit the results of TIM Brasil.

Brazil, Italy, Oi, Telecom Italia (TIM), Telecom Italia Group (TIM Group), TIM Participacoes (TIM Brasil)