M&A news: Long-distance calls
A new, Brazil-based communications giant is in the making as Oi and Portugal Telecom consolidate their alliance
By Ben MillerFor most of the past few months the talk of the
telecom world was América Móvil’s
move for Dutch Royal KPN. However, Oi, Brazil’s
biggest phone company, and Portugal Telecom (PT) surprised
markets by agreeing to turn their reciprocal minority
partnerships into a full merger. With minority investors
and analysts skittish, it is anything but a done deal. Oi
estimates the transaction will generate synergies of 5.5
billion reais ($2.5 billion) in net present value terms
— though analysts are skeptical about the savings
involved — and a simplification of Oi’s
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