SAO PAULO, Feb 19 (Reuters) - Brazil’s antitrust regulator has reached a preliminary deal with Telefonica SA and the local broadband unit of Vivendi SA that could clear the way for their merger, according to a note published in the official gazette on Wednesday.
The board of anti-monopoly watchdog Cade will decide whether to accept the findings of a preliminary technical report that said the companies had agreed “to adopt measures to effectively assure supply, quality and competitive prices for fixed-line telephone, broadband internet and pay-TV markets.”
Telefonica reached a deal with Vivendi in September to pay 7.2 billion euros for Brazilian broadband unit GVT. Cade said the takeover would lead to elevated market concentration in parts of the state of Sao Paulo, but the technical report found minimal risk of higher prices.
The terms of Cade’s preliminary accord with the companies involved will remain confidential until a final ruling, which could set off more merger talks in Brazil.
Telefonica is waiting for the GVT deal to clear before it moves ahead on a possible joint offer with Oi SA and America Movil SAB to buy and split up rival wireless carrier TIM Participações SA , a person with knowledge of the talks told Reuters last month. (Reporting by Priscila Jordao; Editing by Lisa Von Ahn)