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.
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