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Vivo to reinforce its leadership with the acquisition of Telemig
Participações and Tele Norte Participações

 

• Vivo consolidates its leadership by adding 4.8 million subscribers and reaching 35 million subscribers
  
  
• Strengthens its competitive position by expanding its operations to Minas Gerais

August 2, 2007 – VIVO Participações S.A. (“Vivo”) announces that it has signed on this date a stock purchase agreement with Telpart Participações S.A. (“Telpart”) to acquire control of Telemig Celular Participações S.A. (“Telemig Participações”) and Tele Norte Celular Participações S.A. (“Tele Norte Participações”) comprised of 22.72% and 19.34% of total capital, respectively, for an aggregate amount of R$ 1,2 billion, subject to certain price adjustments. In addition, Vivo will acquire from Telpart certain subscription rights for R$ 87 million. The conclusion of the transaction is subject to Anatel approval and ratification by general shareholders meetings of Vivo and Telpart, among other customary closing conditions.

Upon closing of the transaction, in accordance to Brazilian Law, Vivo will launch mandatory tender offers for the acquisition of common shares held by non-controlling shareholders at 80% of the price paid for the controlling stake. The mandatory tender offers will be extended to Telemig Participações, Telemig Celular, Tele Norte Participações and Amazônia Celular.

Additionally, Vivo intends to launch voluntary tender offers for up to 1/3 of all classes of preferred shares held by the non-controlling shareholders in the holding and operating companies, at a 25% premium to the weighted average price of the last 30 trading days until August 01, 2007.

Assuming full acceptance in all offers, Vivo will have acquired a beneficial interest of 58.2% in Telemig Celular and 54.6% in Amazônia Celular, for an aggregate consideration of circa R$ 2,9 billion (including the value of the subscription rights).

With this transaction Vivo adds two attractive assets to its portfolio reaffirming its leadership in the wireless market with 35 million subscribers and a 33% national market share:

• Telemig Celular, the leading wireless operator in the Minas Gerais region, with 3.5 million subscribers and a 31% market share. For the last twelve months ending on March, 31st 2007, net revenues amounted to R$ 1,232 million, with an EBITDA of R$ 383.3 million. In the first quarter of 2007, Telemig Celular achieved a 38.2% margin, being one of the most profitable operators in Brazil.
  
  
• Amazonia Celular, the third wireless operator in the Amazonia region with 1.3 million subscribers and a 22% market share.  For the last twelve months ending on March, 31st, 2007 net revenues amounted to R$ 454 million, with an EBITDA of R$ 46.3 million and reaching a 24.3% margin in the first quarter of 2007.

These two companies will benefit from being part of Vivo through:

• Scale benefits arising from becoming part of biggest national mobile network
  
  
• Improved purchasing power
  
  
• Benefit from a strong brand name with advertisement campaigns at national level
  
  
• Integration of Telemig/Amazônia clients into a larger national community
  
  
• Customer service at national level
  

Additionally, Vivo will expand its commercial operations, reaching 84% of Brazil total population and 93% of the country’s GDP, expanding its activity to the strategic state of Minas Gerais which represents 9.4% of Brazil´s total GDP. The access to this key region will strength Vivo´s commercial and competitive position in the country.

Espírito Santo Investment, Goldman, Sachs & Co. and Machado, Meyer, Sendacz e Opice Advogados are acting as advisors to Vivo in connection with this transaction.

Vivo will be hosting an Investor conference call at 9am (Brasilia time) on August 3rd, 2007, please see additional details below.

Further information about the transaction, the mandatory tender offers and the voluntary tender offers is available at Vivo’s Investor Relations website (www.vivo.com.br/ir).

 

Conference Call Details

Language: English
Date: August 3rd, 2007
Time: 9:00am (Brasília time) / 8:00am (New York time)
Dial-in number:  (+ 1 973 ) 935 8893
Code: 9086422
Webcast and Presentation: (www.vivo.com.br/ir),

The replay of the conference call will be available during seven days on the following number (+1 973) 341-3080, code 9086422.

The Portuguese translation of this conference call will be available on our website from 11:00am (Brasília time).