Telefonica has notified the Spanish stock market regulator CNMV that it has acquired a 50 percent stake in Brasilcel. Owned by Portugal Telecom, Dutch company Brasilcel owns approximately 60 percent of the capital stock of Brazilian mobile operator Vivo Participacoes. The 50 percent stake acquisition follows the 28 July agreement between Telefonica and PT.

As agreed, Telefonica has made the first payment of EUR 4.5 billion. The remaining amount, up to EUR 7.5 billion, will be satisfied under a schedule of payments, including EUR 1 billion on 30 December 2010, and EUR 2 billion on 31 October 2011. However, PT can request for this last payment to be executed on 29 July 2011, and therefore the price of the acquisition and the closing payment will be reduced by approximately EUR 25 million.

As a result of this acquisition, Telefonica gains control of Vivo. In connection with the closing of the transaction, the agreements signed in 2002 between Telefonica and Portugal Telecom, in relation to their joint venture in Brazil, have been terminated. Telefonica will launch a tender offer over the voting shares of Vivo, for a price equal to 80 percent of the price paid by Telefonica to PT for each voting share of Vivo owned by Brasilcel.

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