Portugal Telecom and its Brazilian associate Oi said last week they will merge to create a European and Latin American telecoms giant with more than 100 million customers. The announcement was not unexpected, as rumours of a merger have been floating around since PT took a 23% stake in Oi, but the timing was surprising as many expected it would take longer to put the deal together.
The combined company, called CorpCo for the time being, will be based in Rio de Janeiro and listed on the stock exchanges in Lisbon, Sao Paulo and New York.
Zeinal Bava, PT’s CEO and the recently-named CEO of Oi, will remain as the CEO of the merged company, which will have €12.4 billion in annual sales.
Banco Espírito Santo, PT’s longtime shareholder, will be represented on the CorpCo board by Amilcar Pires and José Maria Ricciardi. The non-executive president of the board will be Mauro da Cunha, a Brazilian. Stocks in both Oi and PT soared higher over the week after the announcement, as analysts saw nearly €2 billion in synergies arising from the combination. BPCC
