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Telefonica CFO: To Limit M&A to Brazil, Mexico and Germany

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BARCELONA (Dow Jones) Telefonica said Thursday it is limiting future merger and acquisition activity to Brazil, Mexico and Germany after years of aggressive acquisitions in Latin America and Europe.

"We fought an uphill battle to gain scale and don't want to be distracted with further acquisitions, except in markets such as Brazil, Mexico and Germany where our operations aren't as important as they could be," Telefonica Chief Financial Officer Santiago Fernandez Valbuena said Thursday.

Valbuena said the company's acquisition strategy had been hard to swallow for some investors, but was the reason for the company's current success, especially in the high-growth region of Latin America.

In Brazil, Telefonica has said it wants to buy the stake in mobile operator Vivo Participacoes it doesn't already control, while in Mexico, the company is sizing up local broadband operators.

Earlier Thursday, the Chief Executive of Telefonica's O2 unit, Peter Erskine, said the company had ruled out acquiring KPN Mobile's E-Plus unit, but could make a deal to improve its broadband offer in Germany.

-By Jason Sinclair, Dow Jones Newswires; +34-91-3958127; jason.sinclair@dowjones.com

­(END) Dow Jones Newswires

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