Telecom Italia decides no need to rush for Oi in Brazil-sources

viernes 12 de diciembre de 2014 10:43 GYT

* Possible Telecom Italia move for Oi not expected for some months

* Telecom Italia wants 51 pct of Oi, eyes 9 bln euros of synergies

By Danilo Masoni and Guillermo Parra-Bernal

MILAN/SAO PAULO, Dec 12 (Reuters) - Telecom Italia has concluded it cannot make a move in the expected consolidation of the Brazilian market, where it controls the second biggest mobile operator, until the corporate turmoil abates at prospective merger partner Oi, according to sources familiar with the matter.

Oi also needs to cut its debt and costs before Telecom Italia makes a move, one of the sources said.

The board of Telecom Italia last month asked CEO Marco Patuano to examine the feasibility of a tie-up between its majority-owned subsidiary TIM Participacoes SA and Oi, without giving a deadline for reporting back.

Telecom Italia is aiming for 51 percent of the combined entity, and documents reviewed by its board last month showed potential synergies worth up to 9 billion euros ($11 billion).

A merger would also create the biggest telecoms player in Latin America's largest market, with a current combined market capitalisation of nearly $16 billion, as fixed and mobile telecoms markets converge and competition grows more intense.

Accounting for a fifth of Telecom Italia's core profits, TIM Participacoes (TIM Brasil) is the second largest mobile network operator behind Telefonica's Vivo but lacks a fixed line network. Telecom Italia lost out earlier this year to Telefonica in the bidding to buy local broadband and pay-TV operator GVT from Vivendi.   Continuación...