After pulling out of the Vivo deal with Portugal Telecom (PT), Telefonica has reportedly hired lawyers to investigate how to break up their Brazilian joint venture, Brasilcel. As you may know from our earlier posts on the “Vivo saga,” Brasilcel is a 50-50 joint venture between PT and Telefonica which controls 60% of the Brazilian mobile network, Vivo.
According to The Wall Street Journal, the Spanish group has hired Dutch law firm De Brauw Blackstone Westbroek to work on how to break up the partnership. The same law firm was involved in advising the companies when they originally formed Brasilcel in late 2002.
Although PT shareholders voted two weeks ago to accept the last Telefonica’s offer, the Portuguese government used special voting rights to block the sale. The European Union’s Court of Justice reacted, saying that the government’s blocking of the deal was illegal.
So where this leads? At some point we thought Telefonica may go for the hostile takeover, but that doesn’t seem like a valid option any more. It seems they’ve found a way to get a better deal. The end goal is to merge Vivo with Telefonica’s Brazilian fixed-line company Telesp to cut operational costs. We’ll keep watching and reporting back to you as soon as something new comes up. Stay tuned…
[Via: CellularNews]