Slim denies Portugal Telecom acquisition rumors

Rumors that Mexico telecom giant Carlos Slim wants to thwart even more competition in its Brazil market by snapping up Portugal Telecom, which owns a stake in local operator Vivo, have been put to rest.

A report yesterday morning emerged that Slim was going to try to prevent Telefonica (NYSE: TEF), a stakeholder of Vivo, from the remaining piece of the company from Portugal Telecom. The timing of such a deal would have made sense as Slim has moved to consolidate his Brazil telecom holdings, including wireline service provider company Embratel with Claro, the Brazilian unit of America Movil (NasdaqGS: AMOV) to save costs.

But just as fast as the rumor emerged, it was put to rest. "There are no talks with Portugal Telecom's people," Slim aide Arturo Elias Ayub told Reuters.

At the same time, Spain's Telefonica is planning on making another run to buy out the remaining stake in Vivo from Portugal Telecom. Portugal Telecom rejected Telefonica's $7 billion bid for its stake in Vivo earlier this month.

Enhancing its Brazilian telecom holdings is a strategic must for Telefonica. Not only does Telefonica face increased competition from Slim's America Movil, but it missed an opportunity to gain a larger piece of the Brazil telecom market when France's Vivendi outbid the service provider for wireline operator GVT.

For more:
- Reuters has this article
- Bloomberg also has this story

Related articles:
Carlos Slim to consolidate Brazilian wireline, wireless assets
America Movil begins acquisition process for Telmex, Carso Telecom
Slim's Mexican telecom consolidation plan needs final regulatory approval
Mexico regulator approves Slim's wireless/wireline consolidation plan
Mexican cable operators protest Slim's merger plans
Mexico's Carlos Slim wants to create a wireline/wireless powerhouse