Brazil's Oi finalizes Brasil Telecom deal -reports

SAO PAULO, March 28 (Reuters) - Brazilian telecommunications group Oi Participacoes (TNE.N) has reached an agreement to acquire local rival Brasil Telecom (BRP.N) after months of negotiations, local media reported on Friday.

The deal, which would create a home-grown telecoms giant with about 70 percent of Brazil's fixed-line market, could be worth as much as 8 billion reais ($4.6 billion), according to Folha de Sao Paulo newspaper.

Valor Economico, Brazil's leading business daily, valued the deal between 4.5 billion reais ($2.5 billion) and 5.3 billion reais ($3.04 billion), in line with an estimate provided by Oi in February.

Both newspapers, which did not say where they obtained the information, said the deal could be officially announced as early as next week.

No one was immediately available to comment at Brasil Telecom (BRTP4.SA) and Oi (TNLP4.SA), which until recently went by the name Telemar.

Oi has been in talks with Brasil Telecom at least since the beginning of the year, setting off a public debate about whether Brazil's strict regulatory framework for the telecoms sector should be overhauled to allow for consolidation.

Brazilian law currently forbids one group from holding two separate telecommunications concessions, which would prevent Oi from buying Brasil Telecom. But officials have signaled that the government is studying ways to do away with the restriction and allow for the takeover.

Brasil Telecom's controlling shareholders, which include several state-run pension funds and U.S.-based bank Citigroup (C.N), have said they are willing to sell. ($1=1.74 reais) (Reporting by Todd Benson and Alberto Alerigi Jr., editing by Dave Zimmerman)