Brazil prosecutors ask antitrust body to block Oi mobile ops sale
Mon, February 7, 2022,
BRASILIA/SAO PAULO, Feb 7 (Reuters) - Brazil's prosecutor's office recommended that antitrust regulator Cade block the sale of Oi SA mobile operations to local rivals TIM SA , Telefonica Brasil's Vivo and Claro, a subsidiary of Mexico's America Movil.
The move sent shares in Oi - which is under bankruptcy protection - sharply down in early trading on Monday, while those of Telefonica's Vivo and Telecom Italia's TIM were also in negative territory.
Waldir Alves, who represents the prosecutor's office at Cade, said in a Sunday report the deal should be blocked due to a "competition violation," also mentioning "potential exclusionary practices."
Cade is expected to analyze the matter on Wednesday's agenda.
Analysts at Guide Investimentos said the move was negative for Brazilian telecoms, noting the market had already priced in the deal.
"Canceling the deal would drag telecom shares into a correction," Guide said in a research note.
Preferred shares in Oi dropped 3.4% to 1.70 reais, while Telefonica Brasil SA was down 2.35% at 48.54 reais and TIM fell 1%. Brazil's stock index Bovespa was down 0.1%.
TIM said in a statement the deal will boost competition, investments and technology development in the coming years, adding it will acquire most of Oi's assets.
The transaction has been under scrutiny since late 2020, when the three companies won the assets in an auction that was contested by rivals such as Algar Telecom. They submitted a joint bid of 16.5 billion reais ($3.12 billion).
The sale was approved by Brazilian telecom regulator Anatel last week. ($1 = 5.2962 reais) (Reporting by Ricardo Brito in Brasilia and Gabriel Araujo in Sao Paulo; Editing by Louise Heavens and Bernadette Baum)
Mon, February 7, 2022,
BRASILIA/SAO PAULO, Feb 7 (Reuters) - Brazil's prosecutor's office recommended that antitrust regulator Cade block the sale of Oi SA mobile operations to local rivals TIM SA , Telefonica Brasil's Vivo and Claro, a subsidiary of Mexico's America Movil.
The move sent shares in Oi - which is under bankruptcy protection - sharply down in early trading on Monday, while those of Telefonica's Vivo and Telecom Italia's TIM were also in negative territory.
Waldir Alves, who represents the prosecutor's office at Cade, said in a Sunday report the deal should be blocked due to a "competition violation," also mentioning "potential exclusionary practices."
Cade is expected to analyze the matter on Wednesday's agenda.
Analysts at Guide Investimentos said the move was negative for Brazilian telecoms, noting the market had already priced in the deal.
"Canceling the deal would drag telecom shares into a correction," Guide said in a research note.
Preferred shares in Oi dropped 3.4% to 1.70 reais, while Telefonica Brasil SA was down 2.35% at 48.54 reais and TIM fell 1%. Brazil's stock index Bovespa was down 0.1%.
TIM said in a statement the deal will boost competition, investments and technology development in the coming years, adding it will acquire most of Oi's assets.
The transaction has been under scrutiny since late 2020, when the three companies won the assets in an auction that was contested by rivals such as Algar Telecom. They submitted a joint bid of 16.5 billion reais ($3.12 billion).
The sale was approved by Brazilian telecom regulator Anatel last week. ($1 = 5.2962 reais) (Reporting by Ricardo Brito in Brasilia and Gabriel Araujo in Sao Paulo; Editing by Louise Heavens and Bernadette Baum)
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