TIM, Claro, and Telefônica Submit Joint Bid for Oi’s Mobile Business

RIO DE JANEIRO, BRAZIL – TIM, Claro, and Telefônica Brasil (controller of Vivo) presented a joint offer for the purchase of bankrupt carrier Oi Group’s mobile business.

The proposal was confirmed in a material fact disclosed to the Brazilian Securities Commission (CVM) by the four largest companies offering mobile telecommunications services in Brazil. The transaction value was not disclosed.

The offer is binding, although it is subject to certain conditions, namely ensuring that TIM, Claro, and Telefônica have the right, as first bidders (or “stalking horse” in the market jargon), to cover any better proposals, should they arise.

In its statement, released on Saturday, July 18th, Oi said that the offer confirms “the market’s interest in our mobile business”.

The company said it intends to focus on its performance as a telecommunications infrastructure provider, including the massification of fiber optics and high-speed Internet, and on providing solutions.

“Should the bid be accepted and the operation be completed, each of the interested parties will receive a share of the business,” announced the companies in a communication to the market.

The purchase proposal includes radio frequency authorization terms; Personal Mobile Service customer base; right to use space in buildings and towers; access or core mobile network elements; and systems/platforms. Mobile assets had already been described by Oi in June.

From the customers’ perspective, “the transaction will boost the user experience and improve the quality of service provided, in addition to the opportunity to launch products and offers,” said TIM.

In similar messages, Telefônica Brasil and Claro also said they expect the deal to provide “greater growth, generation of operational efficiencies, and improved quality of service”.

Oi filed for bankruptcy protection in 2016, when it accumulated a debt of over R$64 billion (US$13 billion). The proceeding is supervised by the Justice of Rio de Janeiro.

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