Tables turn: TIM to buy Oi?

Threatened by the looming possibility of being acquired by one of its main competitors, it now seems that TIM is set to go on the offensive with a bid for Brazil's fourth largest telco Oi.

TIM parent company Telecom Italia's concerns that Spain's Telefónica was preparing the way for a takeover of its Brazilian subsidy have subsided after antitrust regulator Cade said that Telefónica cannot have control of both TIM and its own Brazilian unit Vivo.

However, Oi – which recently merged with Portugal Telecom – said that it is preparing a bid to acquire TIM, possibly together with América Móvil.

In the latest market twist, Telecom Italia is thought to be evaluating a potential acquisition of Oi, Bloomberg reported sources familiar with the matter as saying.

No approach has yet been made for the operator, and any transaction agreed between telcos in Brazil would subsequently need to seek regulatory approval.

TIM could also potentially take on Oi's fixed-line operations as part of the deal, after losing out to Telefónica in its bid to acquire local fixed telco GVT.

Oi is one of the most indebted Brazilian carriers, with net debt of 46bn reais (US$19.7bn) as of the end of Q2, and has been selling non-core assets in recent months to raise cash.