LetterOne Seeks To Invest $4 Billion in Brazil's Telecom Oi

SÃ O PAULO—LetterOne, an investment firm led by Russian billionaire Mikhail Fridman, is planning to invest $4 billion in Brazilian telecommunication company Oi SA, although the offer is conditioned on the success of a potential merger with TIM Participacoes, a local unit of Telecom Italia.

In August of 2014, Oi said that it was considering acquisition or merger possibilities in Brazil, including a potential deal with TIM Participacoes unit, and that it hired Brazilian investment bank BTG Pactual to look at opportunities.

However, since then the company has failed to materialize a deal. Oi has a large share of Brazil's fixed-line market, but has fallen behind rivals in the mobile race and has been trying to make up ground while cutting its heavy debt load.

Oi said on Monday that BTG received a proposal from LetterOne "containing a proposal for the company to enter into exclusive negotiations with LetterOne with respect to a potential transaction with the objective of a possible consolidation of the Brazilian telecommunications sector, involving a potential business combination with TIM Participacoes."

"In accordance with the proposal from LetterOne, sent by BTG Pactual to the Chief Executive Officer and Chairman of the company's board of directors, LetterOne would be willing to make a capital contribution of up to $4.0 billion in the company (Oi), subject to the consolidation activities," Oi said.

Write to Rogerio Jelmayer at [e-mail]

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October 26, 2015 08:05 ET (12:05 GMT)

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