Telecom Italia boss to push for Oi tie-up - sources
By Sophie Sassard and Danilo Masoni
LONDON/BARCELONA Nov 20 (Reuters) - Telecom Italia Chief Executive Marco Patuano is expected to propose at a Friday board meeting that the best option for the company's Brazilian mobile business is to pursue an acquisition of rival Oi, three people familiar with the matter said.
It was not clear whether the board would back the plan, and board chairman Giuseppe Recchi does not want to make a hasty decision on the key strategic issue, said the people.
Patuano's case will be based on an estimate that combining TIM Participacoes, Brazil's No.2 mobile carrier, with Grupo Oi, the No.3 mobile and leading fixed phone provider, would bring cost savings of 20 billion to 30 billion reais ($7.8 billion to $11.7 billion), said one of the people.
The wide range exists because the Italian side needs to do due diligence to evaluate Oi's finances.
"Tomorrow we will talk about strategy in general following the rules of a company that is careful in creating value for all shareholders," Recchi told Radio 24 on Thursday.
Asked whether Telecom Italia will do a deal with Oi, Recchi answered: "Who knows? There is a debate underway. Tomorrow we will talk about Brazil in general."
Brazil's telecom market is in the process of consolidating because growth has slowed in mobile and big investments are needed to upgrade creaky broadband networks. But it is not certain who will be taken out as the market shifts from four to three mobile players.
Oi does not necessarily see itself as prey, despite its high debts. It has bankers working for it on a joint bid for TIM along with competitors Telefonica of Spain and Mexico's America Movil. Continuación...