Sweden-based telco group agrees to acquire an initial 30% for $50 million.

Sweden-based telco group AINMT Holdings on Tuesday agreed a deal that could see it acquire up to 60% of Nextel Brazil.

The two-step transaction will see AINMT spend $50 million (€44.38 million) on an initial 30% stake in NII Holdings-owned Nextel; it will fund the investment by issuing new shares worth a total of $50 million-$75 million.

If the initial investment is completed, AINMT will have the option to pay a further $150 million to increase its stake to 60%, leaving NII Holdings with the remaining 40%. This second stage of the deal is subject to AINMT receiving certain concessions from Nextel’s management, and must be completed by the end of January 2018.

"We have been exploring business opportunities in Brazil for several years, and Nextel Brazil offers ideal conditions for AINMT to implement its successful operating model," said JD Fouchard, CEO of AINMT.

"The spectrum holdings at multiple frequencies and the 2.9 million 3G/LTE subscribers Nextel already has in Brazil provide a sold foundation of assets on which to build," he said.

Nonetheless. Nextel is very much the underdog in Brazil.

Figures gathered by regulator Anatel show that market leader Vivo had 73.90 million connections at the end of January, while second-placed TIM Brasil had 62.82 million. Claro came a close third with 60.17 million connections, followed by fourth-placed Oi, which had 41.96 million.

Nextel Brazil is NII Holdings’ sole operating unit, having offloaded its operations in Argentina and Mexico amid its bankruptcy restructuring in 2015. Before entering Chapter 11 in 2014, NII sold off its units in Chile and Peru.

Investment from AINMT would be a welcome source of new capital for Nextel Brazil.

It "will significantly strengthen our strategic and operational options and capabilities," said Roberto Rittes, who was named CEO of Nextel Brazil in late April.

"It also enables a renewed focus on growing our 3G and LTE business by attracting and retaining customers who value the high quality wireless services we offer," he said.

AINMT owns mobile operator in Norway, and Net1, which offers wireless broadband services in Sweden and Denmark. It is also present in the Philippines and Indonesia via joint investment with local partners in 4G data networks.

"We are excited to partner with AINMT as it continues to export its customer-centric and LTE-driven model to highly-populated emerging markets around the globe," said NII Holdings CEO Steve Shindler. "We believe that gaining access to their differentiated approach and data-driven strategy will allow Nextel Brazil to significantly expand both its growth and profitability."