Spain’s Telefonica has reportedly agreed to buy Portugal Telecom’s 50% stake in Vivo Participacoes, Brazil’s largest mobile operator by subscribers, after increasing its bid for the third time to EUR7.5 billion (USD9.8 billion). Bloomberg cites an unnamed person close to the talks as saying that an accord was reached late yesterday. It is understood the boards of both telcos have yet to ratify the deal though. The latest offer by the Spaniards is 32% higher than its opening offer for control of Vivo, submitted back in May. Telefonica chairman Cesar Alierta wants to merge Vivo with Telecomunicacoes de Sao Paulo (Telesp), the Spanish firm’s fixed line and broadband unit in Brazil.
For its part, Portugal Telecom could now look to use some of the proceeds of the deal to buy a 20%-25% stake in another Brazilian operator, Tele Norte Leste Participacoes (Oi). Talks between the Portuguese firm and Oi are said to be at an advanced stage, according to a person with direct knowledge of the negotiations. The development marks another twist in the ongoing saga. It was only last week that Portugal Telecom acted swiftly to refute press speculation suggesting it had signed a pre-agreement deal to buy a stake in Oi.