UPDATE 2-Telecom Italia CEO does not rule out merger of Brazilian unit

miércoles 23 de julio de 2014 13:51 GYT

* TIM Participacoes, GVT merger not on agenda for now

* Patuano met Brazilian president to discuss investment plans

* Telecom Italia shares down 0.6 pct, TIM up 1 pct (Recasts with CEO Patuano comments, details)

By Leonardo Goy and Danilo Masoni

BRASILIA/MILAN, July 23 (Reuters) - Telecom Italia does not rule out merging its Brazilian operator with a local rival but such a move is not on the agenda for now, its chief executive said after meeting Brazil's president on Wednesday.

The meeting between Telecom Italia CEO Marco Patuano and Brazilan President Dilma Rousseff, who faces a tight race to win elections in October, came amid persistent talk of consolidation in the local telecoms market.

"We can't rule out anything but we are not focused on this at the moment," Patuano told reporters when asked about talk of a potential tie-up between its TIM Participacoes unit and broadband carrier GVT, a unit of France's Vivendi.

Brazilian anti-trust authorities are concerned about possible conflicts of interest in the local mobile market, given that Spain's Telefonica SA has a direct and indirect stake in the two biggest mobile firms in Brazil.

Telefonica owns Vivo, the number one mobile firm, but is also the largest shareholder in Telecom Italia. The Italian firm in turn owns 67 percent of TIM, which is the second largest mobile operator with a 27 percent market share.   Continuación...