May 26, 2010 / 12:56 PM / 9 years ago

Slim to merge Brazil fixed, mobile business-report

* Says Slim plans Embratel, Claro merger in two months

* Combined company seen slashing annual costs up to 30 pct

* Slim seen eyeing takeover of cable company Net Servicos

SAO PAULO, May 26 (Reuters) - Mexican billionaire Carlos Slim, the world’s richest man, plans to merge his mobile and fixed-line businesses in Brazil in a bid to slash costs, Folha de S.Paulo newspaper reported on Wednesday, citing unnamed sources close to Slim.

Slim plans to merge fixed-line company Embratel EBTP4.SAEBTP3.SA with Claro, the local unit of America Movil (AMXL.MX)(AMX.N), in up to two months, Folha said. Jose Formoso Martinez, the chief executive of Embratel, will likely be named to head the combined company, the daily added.

Joao Cox, the CEO of Claro in Brazil, is also in the running for the top post of the merged company, but Slim prefers Martinez, Folha said. Claro is Brazil’s No. 2 mobile phone company, behind Vivo VIVO4.SA(VIV.N).

Embratel’s media department wasn’t available for comment, while a Claro spokeswoman in Brazil said the company didn’t have an immediate comment on the Folha article.

Slim has been dissatisfied with the results of his Brazilian units and plans the restructuring to fend off competition from France’s Vivendi (VIV.PA), Spain’s Telefonica (TEF.MC) and Portugal Telecom PTC.LS, Folha reported. Vivendi last year took over Brazilian phone group GVT and may seek mobile phone licenses in the country, while Telefonica and Portugal Telecom share control of Vivo.

The combination of the Brazilian units is part of a broader plan by Slim unveiled in January to shift control of fixed-line companies Telmex and regional group Telmex Internacional TELINTL.MX to his flagship company, America Movil (AMXL.MX) (AMX.N), to increase savings. America Movil started tender offers for Telmex International and Carso Global Telecom TELECOMA1.MX, the majority owner of Telmex, on May 11.

The combined Claro-Embratel company may be able to slash annual costs between 20 percent and 30 percent by sharing telecommunications infrastructure and getting better terms on bank loans, Folha said, citing initial estimates.

America Movil also plans to eventually take over Brazilian cable television operator Net Servicos NETC4.SANETC.O, though that would require changes in local laws that bar foreign control of domestic cable companies, Folha reported.

Net Servicos is controlled by Brazilian media group Globo, with a 51 percent voting stake, while Slim owns the remaining 49 percent voting stake through America Movil, the daily said. (Reporting by Elzio Barreto, editing by Dave Zimmerman )

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