MADRID, Spain-The Brazilian joint venture of Telefonica Moviles and Portugal Telecom has acquired Tele Centro Oeste (TCO), which operates in the capital city of Brasilia and the midwestern and northern regions of the country.
The transaction will be completed in three stages, the first of which is the acquisition from Fixcel of its 61.1-percent stake in TCO for about $405 million. Telesp Celular Participacoes, the joint venture’s Brazilian subsidiary, will then make a public offering to the other minority shareholders of TCO and Telesp will then incorporate TCO into its group through a merger of shares, offering remaining TCO shareholders nonvoting stock of Telesp.
Telefonica said TCO had 3 million subscribers and earnings before interest, taxes, depreciation and amortization of 43 percent in September 2002. The acquisition will give the European group a market share of 54 percent in Brazil, Telefonica said.
The acquisition gives the European joint venture operations that represent 80 percent of the Brazilian gross domestic product and coverage in all major cities, allowing the companies’ CDMA networks to compete with the nationwide GSM network being built by Telecom Italia Mobile.
Telesp Celular’s Luis Avelar, senior vice president of data development and marketing, said in December that nationwide coverage is important to its corporate clients.
