Spain's telefonica will acquire control of Brazil's largest mobile phone operator, Vivo, in a newly sweetened €7.5bn (£6.2bn) deal with Portugal Telecom.

Telefonica and Portugal Telecom both said yesterday that their boards had approved the transaction, which has been in the works for months and was initially vetoed by the Portuguese government.

The Spanish telecoms company has agreed to buy Portugal Telecom's 50 per cent stake in Brasilcel, a Dutch holding company, which in turn owns 60 per cent of Vivo. Telefonica already owns the other half of Brasilcel.

The Portuguese government blocked an initial deal by exercising special voting rights, but was overruled by the European Union's Court of Justice. Telefonica is eager to expand its significant presence in the fast-growing Latin American sector.

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