Shares of Telecom Italia SpA (ADR) TI were trading lower by 0.17 percent at $11.96 shortly after Friday's opening bell after a report by Reuters suggested the company is in talks with Oi SA (ADR) OIBR over a merger.
According to Reuters, Oi has began merger talks with rival firm TIM Participações SA, a firm which is controlled by Telecom Italia. The publication, citing "two sources with direct knowledge of the matter" noted that the discussions are initially focusing on governance issues.
Telecom Italia's Board and Oi's Chief Executive Bayard Gontijo are leading the talks.
Oi is Brazil's most indebted phone carrier, Reuters added. As such, the company is seeking a merger as it also lags behind its rivals in Brazil's "fiercely competitive" market.
Shares of Oi were trading higher by 3.28 percent at $0.406 Friday morning.
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