France Telecom says it has entered into a put-and-call-option agreement with Sonae that will allow it to sell its entire 20% stake in Portugal’s Sonaecom.
The call is exercisable by Sonae (Maia, Portugal), which owns 53.17% of Sonaecom (Porto, Portugal), over the next 18 months, while the put will be exercisable by France Telecom in the three months following this initial period.
Both are exercisable at the same price of €98.9 million ($132 million), but the price could be increased to €113.5 million if Sonaecom participates in a “material transaction” that consolidates or restructures the Portuguese telecoms sector in the 24 months following the signature of the agreement.
France Telecom says the “agreement secures [its] stated objective of disposing of its minority shareholding in Portugal under terms that allow the Group to benefit from the potential consolidation of the Portuguese telecoms market”.
Sonaecom recently sealed a deal to merge with cable operator ZON Multimedia (Lisbon, Portugal), and is set to hold a 40% stake in the combined company.
The merger should help to relieve some of the competitive pressure on Portuguese operators and unite Sonaecom with a company that is performing strongly in the county’s broadband market, where Sonaecom has been struggling.
It should also generate cost savings for the two players, allowing Sonaecom – for instance – to abandon its wholesale arrangements with Portugal Telecom for broadband services.
The companies expect to complete the deal by the end of June 2013.