Sonaecom’s Almeida Says a Merger With Zon Would Make Sense

Sonaecom SGPS SA, owner of Portugal’s smallest mobile-phone operator, rose the most in more than two years in Lisbon after an executive said a merger with Zon Multimedia SGPS SA, the country’s biggest-cable television provider, would be good for both sides.

The companies are “completely complementary,” Sonaecom Deputy Chief Executive Officer Miguel Almeida said today in an interview. “For the past four years we have defended” the idea of a merger. “I don’t know if it will happen one day.”

Sonaecom gained 7.3 percent, the biggest advance since June 2, 2010, to close at 1.4 euros in Lisbon. Zon rose 9.2 percent, the most since January 2011, to 2.384 euros.

While Sonaecom and Zon aren’t holding talks at the moment, it would make sense to merge Sonaecom’s Optimus mobile-phone unit with Zon’s cable-television business to create a bigger player in Portugal, Almeida said in Oporto, where he was attending a conference for small- and mid-cap companies.

“It makes sense for the market, as it would create an operator with a different level of scale,” the executive said. “It makes sense for shareholders because the deal would add value” for both companies.

Zon’s Chief Executive Officer Rodrigo Costa and Chief Financial Officer Jose Pedro Pereira da Costa, who were also attending the conference, declined to comment on a possible merger.

“I have absolutely no comment to make,” Costa said.

Zon’s biggest shareholder is Angolan investor Isabel dos Santos, with a 28.8 percent stake. Sonae, a Portuguese retailer that controls Sonaecom, last year formed a partnership with dos Santos’s Condis unit to open a chain of hypermarkets in Angola.

Zon was spun off from Portugal Telecom SGPS SA following Sonaecom’s failed bid for the former national phone monopoly. Sonaecom competes with Portugal Telecom’s TMN mobile unit and Vodafone for mobile customers in Portugal. Zon also competes with Portugal Telecom’s Meo cable unit.

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