Portugal Telecom and Oi propose Brazilian merger
02 October 2013 |
Portugal Telecom (PT) and Brazilian telco Oi have reportedly proposed a merger of the two companies, to create a single Brazil-based entity.
PT is Oi’s largest shareholder, and a successful merger could build a joint company worth an estimated €1.8 billion, Reuters reports.
“The merger is a natural fulfilment of the industrial alliance established in 2010, creating a leading telecoms operator led by Zeinal Bava as CEO,” a Portugal Telecom spokesperson said.
Bava is CEO at Oi, and the proposal suggests that each ordinary share in Oi is exchanged for 1 share in a new single entity, to be called CorpCo.
Oi has suggested a cash capital increase of a minimum of €2.3 billion, and has a target of €2.7 billion to improve CorpCo’s balance sheet flexibility.
A successful deal would see PT shareholders own 38.1% of CorpCo.
Earlier this year, Portugal Telecom denied rumours that it was to acquire Oi.