Vodafone Portugal Opposes Sonae, Portugal Telecom Merger"

LISBON -(Dow Jones)- Vodafone PLC's (VOD) Portugal unit on Monday said it opposed the idea of merging Sonaecom SGPS' mobile unit Optimus with Portugal Telecom's mobile unit TMN.

"The bid for PT by Sonae could create or reinforce a dominant position from which could result significant barriers to competition in the mobile market," Vodafone said in a statement. "Therefore, it shouldn't be authorized."

On Feb. 6, Sonaecom launched a EUR11.1 billion unsolicited bid for PT. PT's board has rejected the offer, saying it undervalues the company.

One of Sonaecom's conditions for the merger to proceed would be authorization to merge Optimus and TMN.

PT has argued that would harm competition, as it would reduce the number of mobile companies in Portugal to two from three, with the PT/Optimus combination having around 65% of the market.

Vodafone's comment was part of its response to questions from the national competition authority, or AdC, which is analyzing Sonae's proposal.

The AdC must rule on the merger proposal before it can be formally registered with the stock market regulator. Sonae has said it expects the process to take until at least July.

-By Erik T. Burns, Dow Jones Newswires; +351 21 319 1863; erik.burns@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 20th March 2006