The subsidiaries involved include operators based in the major population centers in Brazil (Sao Paulo, Rio De Janeiro, and Salvador).
Telefonica Moviles and Portugal Telecom have a joint venture in Brazil known as Brasilcel, the market leader with its Vivo brand. Brasilcel will launch a public offer for more than 214 billion ordinary and preference shares, which will cost somewhere in the region of 420 million euros ($508 million).
Minority shareholders in the four subsidiaries are being offered a 20% premium on average trading prices over the past 30 days. The public offer is scheduled to open in the first week of September and will run for 30 days.
Mobile penetration rates in Brazil are roughly at 30%, well below European and North America levels. Spain and Portugal have a market penetration rate of more than 90%, and the deal makes sense if the operators are to capitalize on the rapid growth in Brazil.
