Telecom Italia (NYSE: TI) expects to take control of Argentine fixed line operator Telecom Argentina (NYSE: TEO) and compatriot mobile operator Telecom Personal in the short term, local paper La Nación reported, citing Italian press.
According to papers, TI is already preparing the details of the operation.
Control of the operators will be possible if Telecom Italia exercises call option rights for control of Sofora Telecomunicaciones, the holding company that controls Telecom and Personal.
Sofora controls TEO and mobile company Personal by virtue of its 68% stake in Nortel Inversora (NYSE: NTL), the holding company that owns 54.7% of Telecom Argentina. TI already owns 50% of Sofora and the remainder is controlled by Argentine investment group Grupo Werthein.
Telecoms consultancy firm TBI Unit director Pablo Tedesco told BNamericas that TI was interested in taking full control of Telecom since this business is very profitable for the European company. Tedesco added that TI's executives see the Argentine operation as strategic for TI.
However, Grupo Werthein also has its sights set on controlling TEO, and Tedesco believes that the Argentine government will certainly be involved in this issue. "The government could pressure Telecom Italia to sell its stake to the local investment group," he said.
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