Telefonica Brasil expects $1.09 billion of synergies with Oi deal

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FILE PHOTO: The logo of Telefonica is seen on company's headquarters in Bogota

SAO PAULO (Reuters) – Telefonica Brasil said on Wednesday it estimates the assets acquired from Brazilian telecom Oi Movel will create 5.4 billion reais ($1.09 billion) in value.

In a presentation the company, which operates in the country under the brand Vivo, said the figure refers to efficiencies in costs and investments and already accounts for incorporation costs.

The company added it expects earnings before interest, taxes, depreciation and amortization (EBITDA) and operating cash flow margins to be above 70%.

Telefonica expects the complete migration of Oi Movel’s clients to its base to take place until the end of the first quarter of 2023.

The company agreed to buy Oi’s mobile operations in an auction in late 2020, when it made a joint bid of 16.5 billion reais with rivals TIM SA and Claro, a subsidiary of Mexico’s America Movil SAB de CV.

($1 = 4.9642 reais)

(Reporting by Alberto Alerigi Jr.; Writing by Carolina Pulice; Editing by Chris Reese)