Brazilian operator Oi and Telecom Italia have begun talks over a possible merger of Oi and TIM Brasil, according to unnamed sources cited by Reuters. The companies are looking to take advantage of an expected easing of Brazilian telecoms industry regulations governing such a merger, said the sources, adding that the board of Telecom Italia is negotiating directly with Oi CEO Bayard Gontijo. Although talks could establish the basis for a final proposal to combine Oi and Telecom Italia-controlled TIM, the value of a potential deal hasn’t yet been discussed, according to the report.
A spokesman for Telecom Italia subsequently denied any formal nor informal contacts with Oi over a possible merger of their Brazilian assets, Reuters added.
The development comes after the LetterOne fund, owned by Russian billionaire Mikhail Fridman, last year offered to inject USD 4 billion into Oi if it merged with TIM Brasil to create the country’s largest mobile operator. LetterOne has a seven-month exclusivity period for the Oi-TIM deal that expires in May but one of the sources cited by Reuters indicates that Telecom Italia doesn’t consider the fund’s involvement in the deal as necessary. Other sources suggest that Oi's adviser, Grupo BTG Pactual, could present a merger proposal to both companies before the end of January.
