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Telecom Italia: Open to TIM options, including Oi merger if it gets straight

Nov. 12, 2015 4:39 PM ETTelecom Italia S.p.A. (TIIAY) StockAMX, TSU, VIV, OIBZQ, TIIAYBy: Jason Aycock, SA News Editor6 Comments
  • Telecom Italia (TI -1.3%) says it's open to all options for its Brazilian mobile unit TIM Participações (TSU -3.1%), CEO Marco Patuano says -- including a merger with the country's leader Oi (OIBR -2.9%), if Oi can clean up its debt and if regulations get looser.
  • TI has made no decisions about whether it would want control in a tie-up with Oi, he says. Oi recently entered into seven months' exclusive talks with Mikhail Fridman's Letter One investment company over merging Oi with a competitor.
  • Talk of Brazilian telecom consolidation has boiled at a high pitch for months, more so in recent weeks as Fridman floated a $4B incentive to get a deal to happen. An Oi-TIM combination would get a boost against Telefonica Brasil (VIV -2.5%) and America Movil (AMX +0.3%). Key CEOs are in near-unison about the country changing its rules governing fixed-line concessions, though.
  • Earlier in Barcelona, Oi's Bayard Gontijo said he expected a government proposal to change rules in about 10 weeks.
  • Patuano is calling for Oi to work out its deb and financial structure: "So I think 2016 will be the magic year for Oi to find a solution whatever that is."
  • America Movil's Carlos Garcia Moreno is skeptical, though: "For anyone who wants to take over Oi, it is basically like tying yourself to a cannonball and jumping into the water."
  • Previously: Oi ADRs down 5% as Brazilian telecom swings to Q3 loss (Nov. 12 2015)

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