Oi purchases Brasil Telecom and creates supertelephone company
DCI - 04/28/2008
After four months of negociations, Oi (former Telemar) and Brasil Telecom (BrT) signed the final agreement to create the Brazilian « supertelephne company ». BrT's purchase by Oi, oficially anounced last Friday, can exceed US$ 12 billion, according to the purchaser's CEO Luiz Eduardo Falco. If the merger of the companies does take place, Oi expects to grow more than 140% untill 2013. The total amount will be from the company's cash and from possible funds raised in the market, from daily operations. According to the company, there will be no financing, not even from the National Bank of Social and Economic Development (BNDES). The totality of the funds used for the acquisition will be taken directly from the company's cash flow, which is around R$ 6.7 billion (US$ 3.83 billlion). The rest will come form possible capital raisings that the company will make in the market, through loans or debentures, for example, but always in the company's field of action. The acquisition will increase the sector's competitivity and, after the merger, the new company would have a market share of 17.9% in the market of mobile telephones, against Claro's 25%, TIM's 25.8%. and Vivo's 30.9%. In addition to that, in the area of corporate data transmission, the second backbone of national coverage would be created. « For the first time competiton in data transmission in the Country is created, a market dominated by Embratel today ", said Falco, who foresees reaching 110 million clients in the next five years with the new company, 30 million of which outside Brazil. Oi should follow in competitors such as TIM and Telefónica, which had an income leap by working outside their origin countries. The supertelephone company will focus more on Latin America, Europe and Africa, for the company expects to grow internationally, too. It also studies oportunities of purchasing other companies, but, for such, it will wait to conclude its businesses in Brazil. After concluding all stages of the restructuration, readjustments and operations of incorporations and acquisitions, the last composition of the stockholder control of the supertelephone company will be with Andrade Gutierrez and Carlos Jereissati's La Fonte groups. In the Country, the « supertelephone company » can have 22 million users in landline telephones. In celular telephones, 38 million, and 12 millions in broadband. Another 8 million in cable television. Today, Oi has nearly 18 million users in mobile telephones and 14 million in landline ones. The aim is to grow more than 140% in five years.