Telefonica Hires Lawyers to Break Up Brazilian Subsidiary
Published on: 19th Jul 2010
Note -- this news article is more than a year old.
After being rebuffed by Portugal Telecom (PT) over the weekend, Telefonica is reported to have hired lawyers to investigate how to break up their Brazilian joint venture, Brasilcel. The joint venture, which both company's own half of, in turn controls 60% of the Brazilian mobile network, Vivo.
At the weekend, Telefonica walked away from its attempt to buy PT's half of the joint venture following repeated rebuffs from PT's management.
Though PT shareholders voted two weeks ago to accept the offer, the Portuguese government used special voting rights to block the sale, citing national interests. The European Union's Court of Justice then ruled that the Portuguese government's blocking of the deal was illegal.
The Wall Street Journal reported that Telefonica has hired Dutch law firm De Brauw Blackstone Westbroek to work on how to break up the partnership. The law firm was involved in advising the companies when they originally formed the Netherlands-based holding company in late 2002.
The dispute between the two companies would likely be decided in an arbitration court, the person said, adding both companies would either be awarded half of the shares Brasilcel has in Vivo or the shares would be sold to the company which bid the most for them.
Telefonica had wanted to merge Vivo with its Brazilian fixed-line company Telesp.
On the web: Wall Street Journal