NEWS

American Tower, Algar buy telecom assets of Brazil's Cemig

Thursday, Aug 09, 2018

American Tower Corp (AMT.N) and unlisted Brazilian operator Algar Telecom SA on Wednesday purchased the broadband network of Cia Energetica de Minas Gerais SA (CMIG4.SA), known as Cemig, potentially spurring more dealmaking in Brazil’s telecoms space.

At an auction in Cemig’s headquarters in the interior state of Minas Gerais, American Tower won Lot 1 of the network with a 571 million reais ($152 million) bid, and Algar won the smaller Lot 2 with a 78 million reais bid.

While the Brazilian units of Telefonica SA, Telecom Italia SpA and America Movil SAB de CV (AMXL.MX) had mulled bids, they ended up not making any offers. Some potential buyers Reuters consulted in recent weeks considered the 367 million-real minimum price for the units to be relatively high.

Still, American Tower's bid of 571 million reais was well above the minimum. Brazil-listed shares in Cemig were trading up 0.7 percent in early afternoon trade, while the benchmark Bovespa .BVSP was roughly flat.

For Algar, the profile of Lot 2 fits with the company’s plans to expand its network into Brazil’s northeastern states. The company had planned an initial public offering late last year, but scuttled it after GIC, a sovereign wealth fund established by the government of Singapore, took a stake in the firm and injected about 360 million reais of capital.

Other potential telecom deals in the short-term in Brazil include the sale of carrier Nextel by NII Holdings Inc (NIHD.O). Major carrier Oi SA  is often floated as a potential acquisition target in the long-term.

 

Source: reuters.com

Other News