Report: America Movil, Telefonica, Oi want to acquire/break up TIM
- Brazilian paper Folha de S. Paulo reports America Movil (AMX +1.6%), Telefonica's (TEF +1.2%) Vivo (VIV +4.9%), and Oi (OIBR +12.3%) have agreed in principle to pay R$31.5B ($13.1B) to acquire and break up TIM Participacoes (TSU +8.6%), Telecom Italia's (TI +2.9%) Brazilian unit.
- The paper adds a formal offer will be made to TI shareholders. TI chairman Giuseppe Recchi says his firm hasn't yet received an offer. TIM's market cap is currently at $12.5B.
- AMX would reportedly keep 40% of TIM, Telefonics 32%, and Oi 28%. Rumors of a joint bid have been around for weeks, as Brazilian carriers dealing with slowing growth and price wars bet consolidation will improve their fortunes.
- Markets are responding well to the report. Oi merger partner Portugal Telecom (PT +8.9%), whose main asset is a stake in the combined company, is also rallying.
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