News
Brazilian telco reportedly steps up pursuit of Telecom Italia-owned rival.
Brazil’s Oi is negotiating a US$1 billion credit line with two banks as part of its pursuit of rival operator TIM Brasil, it emerged this week.
Unnamed sources cited by Bloomberg said the funds will be used to pay down short-term debt, shoring up Oi’s finances as it looks to make an offer for TIM. Barclays and Santander are the likely lenders, the sources said; both banks are also expected to join Oi’s M&A advisory team, which includes lead negotiator BTG Pactual.
Oi is also still holding exclusive talks with investment group LetterOne, which has pledged to invest $4 billion in Oi provided it acquires TIM.
Speculation regarding a potential merger between Oi and TIM is proving persistent despite multiple denials issued by the latter’s parent Telecom Italia.
The Italian incumbent published its latest denial on 8 January, insisting that it has held neither formal nor informal talks with Oi about TIM, following fresh reports to the contrary.
Telecom Italia has said repeatedly that it views TIM Brasil as a strategic asset.
Its Brazil arm is the country’s second-largest mobile operator, with 71.9 million customers and a market share of 26.3% at the end of October, according to regulator Anatel.
Oi is the smallest of Brazil’s big four, claiming a market share just shy of 18% at the same date, but it also claims a 25.1% share of the fixed broadband market, where TIM has no presence.
