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Brazil Problems Delays Telefonica's Investment in Telecom Italia
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MILAN -(Dow Jones)- Italy's financial heavyweights that recently bought control of Telecom Italia's controlling holding Olimpia, together with Spain's Telefonica, said Tuesday the closing of the deal has been postponed pending "authorization procedures," in Brazil.
In April, Telefonica, together with Italian banks Intesa Sanpaolo and Mediobanca, insurer Assicurazioni Generali and Italy's Benetton family, have agreed to buy Olimpia, the holding company that owns 18% of Telecom Italia, from Pirelli and its partners.
The deal, which will give the Spanish-Italian consortium a 23.6% interest in Telecom Italia, was expected to be closed by October.
The Olimpia buyout doesn't require the approval of the European Union Commission, but it's still awaiting the green light by Brazil's telecommunications regulator Anatel.
The deal has potentially enormous consequences for the Brazilian mobile phone market. Telefonica is part-owner of Brazil's leading wireless operator, Vivo Participacoes, while Telecom Italia owns the No. 2 cellphone operator TIM Participacoes. Anatel must rule on whether the deal breaks local telecom industry regulations, but has set no date for the ruling at present.
Telecom Italia's new Italian investors said Tuesday in a joint statement that the closing date is postponed "until the completion of such procedures, provided however that the closing date shall take place anyway within 15 days of the expiration of 180 days from the date of the execution of the Stock Sale Purchase Agreement dated 4 May 2007."
-By Giada Zampano, Dow Jones Newswires; +39 02 5821 9901; giada.zampano@dowjones.com
(END) Dow Jones Newswires "
Tags: [telecom italia] [tim] [european union] [vivo] [benetton] [anatel] [union] [02] [telefonica,]
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