TI wins Argentina battle
Telecom Italia (TI) has won control of Telecom Argentina after gaining approval from Argentina’s antitrust agency, the National Commission for the Defence of Competition (CNDC), to increase its 50% stake in Sofora, the holding company that controls the fixed-line incumbent.
TI can now raise its stake to 58%, a deal which it says will result in a special gain in its Q4 results of €250 million. “The increase in the Sofora stake will not involve any financial outlay for Telecom Italia and will allow the group to consolidate the results of Sofora/Telecom Argentina from the fourth quarter,” a statement from Telecom Italia said.
The CNDC had ruled in August 2009 that TI’s stake in Telecom Argentina violated antitrust legislation, arguing that the market became a monopoly after Telefonica bought a stake in TI in 2007, as Telefonica already owns the country’s largest fixed-line operator, Telefonica Argentina. TI said that measures have been agreed upon to ensure there will be no influence or participation on the part of Telefonica in any TI decisionmaking process concerning its Argentinean subsidiaries.
Telecom Italia is one of a number of European incumbents looking to Latin America, but has denied an interest in acquiring Sprint Nextel’s south American activities.