A long-denied potential merger between Portuguese broadband operators Zon Multimedia and Optimus, which is owned by Sonaecom, the communications arm of Portuguese conglomerate Sonae, would create value and is now far more likely to proceed, Sonaecom deputy CEO Miguel Almeida told Reuters. With reference to the increased role of Angolan businesswoman Isabel dos Santos, who increased her overall stake in Zon to 28.8% earlier this year through her Kento Holding and Jadeium investment arms, Almeida commented: ‘A merger between Sonaecom and Zon makes sense. We believe it is an operation which would generate value for the market and shareholders and would create a more complete and stronger operator. A new set of conditions is gathered which may help the merger happen. They have nothing to do with the merits of the operation which remain the same, they have to do with the changes in shareholder structure. A year ago Zon’s structure was completely fragmented, the largest shareholder had 10%, now it has 30% and the dynamics are completely different, as can be the decision-making process’.
In January 2012 Zon shareholders voted their approval of a plan to lift voting rights beyond the current 10% limit. The outcome paved the way for existing shareholders to raise their stakes in the company, whilst reigniting speculation that Zon could be set to merge with rival operator Optimus. Industry observers have long argued that four established broadband providers operating in a mature market and recession-hit economy such as Portugal are at least one too many. According to TeleGeography’s GlobalComms Database, at end-June 2012 struggling Optimus claimed a meagre 2.8% market share, but does boast a fibre-to-the-home (FTTH) network covering 400,000 Portuguese households. Zon Multimedia had a 33.4% market share at the same date, some way behind fixed line incumbent Portugal Telecom Comunicacoes (PTC, 50.4%).