The proposed merger between Portugal Telecom (PT) and its Brazilian wireless subsidiary Oi has moved another step closer with the news that Portugal’s competition watchdog Autoridade da Concorrencia (AdC) has approved the tie-up. The news was not unexpected given that the merger does not affect competition in the Portuguese telecoms sector, but it now means the deal has been given the official green light on both sides of the Atlantic, with the Brazilian equivalent Cade announcing last month that it had no objections to the combination.
Meanwhile, small bondholders of PT have voted to approve the merger, with 99.96% of those attending a bondholders meeting agreeing to the deal, Jornal de Negocios reports. Shareholders of PT and Oi are due to meet at a general meeting on 27 March to decide on a proposed capital increase and the valuation of PT’s assets.
According to a report from Reuters, Oi has now been given a firm commitment by up to 14 Brazilian banks to buy up to BRL6 billion (USD2.5 billion) of stock in its planned share offering. Oi expects the price for the share offer to be decided upon by mid-April, with the firm planning to sell up to BRL8 billion in new stock to help cut debts. PT will contribute its assets – excluding Oi – to the merger and hold 38% of the enlarged entity, which has initially been dubbed CorpCo, while Oi will have a stake of around 30%. Minority shareholders of Oi have complained that the deal favours large shareholders such as PT, though an independent advisor recommended earlier this week that they approve the merger as the benefits of the combination outweigh the negatives.