The two companies will explore proposals "to develop viable structuring and financing options that would enable Oi to participate in any consolidation of the Brazilian telecommunications sector", according to L1. The company's original offer to Oi was a USD 4 billion capital injection to help the Brazilian operator participate in market consolidation. The transaction is conditional on Oi agreeing a merger with TIM Brasil, the operator controlled by Telecom Italia. L1 Technology said it is a long-term investor, and its team has ten years’ experience in the telecoms sector in emerging and developed markets.
If the transaction is completed, Oi said it expects it will lead to a reduction in leverage and help turn the company into a more robust player, supported by the generation of important synergies and economies of scale. A potential business combination of Oi and TIM would create a more complete and well-positioned telecommunications operator that would be able to compete against global players already operating in Brazil, Oi said.
