Telefonica SA has announced that the company has agreed to purchase the shares held by Portuguese company SGPS SA in the Brazilian telecom company Vivo Participacoes SA. The agreement is said to be worth 7.5 billion Euros and is said to be an all-cash deal. In the first installment, Telefonica shall pay SGPS 4.5 billion euros and the rest of the money is expected to be paid in two separate installments.
There is a lot of activity happening on the Brazilian telecom front. SGPS SA is itself reported to be in talks with the country’s biggest telecom operator, Tele Norte Leste Participacoes SA to buy shares in Oi for a reported 3.7 billion euros. The Portuguese company is expected to gain 22.4% stake in Oi consequent to the deal.
The news is yet to have any significant impact on the Telefonica stocks. Telefonica’s ADRs at the New York Stock exchange (NYSE:TEF) are currently up a modest 0.49% and is currently trading at 66.05.