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Telefonica says deal for Brazil's Vivo over

Telefonica says deal for Brazil's Vivo over

Spanish telecommunications giant Telefonica on Saturday pulled out of negotiations to acquire a (EURO)7.15 billion ($9.3 billion) stake in Brazil's leading cell phone company Vivo.
Telefonica said in a statement lodged with Madrid's stock exchange early Saturday that the deal fell through after Portugal Telecom's board of directors failed to accept the Spanish company's offer by the deadline.
"The deal has been extinguished," Telefonica said in the statement. Telefonica also released a copy of a fax allegedly sent by PT's board late Friday night to request an extension on the offer to July 28.
Though PT shareholders voted two weeks ago to accept the offer, the Portuguese government used special voting rights to block the sale, citing "national interests."
The European Union's Court of Justice then ruled that the Portuguese government's use of its so-called golden share to block the deal was illegal.
Telefonica and PT each own 50 percent of Brasilcel, a Dutch holding company which owns 60 percent of Vivo. The Spanish company's offer was to buy PT's half of Brasilcel and following the court's finding it extended the offer until July 16.
Telefonica is keen to expand its already significant presence in the fast-growing Latin American sector where it has an important foothold in burgeoning markets such as Chile, Colombia, Mexico, Peru and Venezuela as well as Brazil.
Brazil's economy is booming, in contrast to Telefonica's home territory of Spain which is struggling to emerge modestly from nearly two years of recession.
PT is Portugal's largest telecommunications operator and the Portuguese government demanded it maintain a foothold in Brazil as it did not want to lose PT's Brazilian revenue stream.
Telefonica SA is a much larger company than Portugal Telecom SGPS SA, employing about 237,000 people compared with the around 32,000 employees at its Portuguese counterpart.
Telefonica would not comment Saturday on the possibility of legal action following the collapse of the deal.


Updated : 2021-03-06 13:14 GMT+08:00