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Telefónica, one of the leading telecoms groups in Europe and Latin America, is increasingly confident of securing exclusive control of Vivo, Brazil’s largest mobile operator.

Brazil overtook Japan last year to become the world’s fifth-largest mobile market. It has about 100m mobile customers.

Vivo is jointly controlled by Telefónica and Portugal Telecom, which share a 63 per cent stake of the mobile operator. Portugal Telecom is fighting a takeover bid by Sonaecom, a smaller Portugese telecoms company.

Sonaecom is willing to sell Portugal Telecom’s Vivo stake to Telefónica if it succeeds with its hostile takeover bid, said people familiar with the matter.

PT is also willing to consider selling its Vivo stake to Telefónica if it persuades its shareholders to reject Sonaecom’s bid, said people with knowledge of the situation.

Telefónica is increasingly confident of securing control of Vivo regardless of the outcome of Sonaecom’s takeover bid, although no deal has yet been done.

PT said its Vivo stake had a book value of €2.7bn at September 30. Vivo had 28.7m customers, but was losing market share to rivals Tim Brazil and Claro.

Paulo Azevedo, chief executive of Sonaecom, said Vivo’s performance had been “dreadful”, and blamed it partly on Telefónica and PT’s joint control.

He declined to comment on whether Sonaecom would sell PT’s Vivo stake. But people familiar with the matter said Sonaecom had held informal talks with Telefónica about selling PT’s Vivo stake. Sonaecom could use proceeds from the Vivo stake to repay the debt it would have after buying PT. Sonaecom has arranged a €14.7bn bank loan to finance the bid.

People familiar with the matter said Sonaecom, along with selling the Vivo stake, would seek a deal with Telefónica on Medi Telecom, the Moroccan mobile operator that has 4m customers.

Telefónica and PT own 32 per cent each of Medi Telecom, and Sonaecom would seek Telefónica’s stake.

Zeinal Bava, one of PT’s executive directors, said the group was focused on Vivo’s turnround.

“Having said that, Telefónica has been a great partner to have, and maintaining good relationships will always allow us to discuss openly our strategic options in the future,” he added.

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