A Telefonica store is pictured in central Madrid in February. Spanish telecoms giant Telefonica said on Wednesday it had reached an agreement in principle to buy Portugal Telecom's stake in Brazilian operator Vivo in a deal reportedly worth 7.5 billion euros.
"The agreement will be submitted for approval to the board of both firms, which are scheduled to meet today," it said in a statement.
Telefonica and Portugal Telecom jointly own Vivo via investment vehicle Brasilcel, which owns 60 percent of the company.
Earlier on Wednesday the online edition of daily newspaper El Pais reported that Telefonica had increased its offer for Vivo to 7.5 billion euros (9.75 billion dollars) from 7.15 billion euros previously.
Telefonica's initial offer of 5.7 billion euros was immediately rejected by Portugal Telecom's board in May.
Telefonica then raised the offer to 6.5 billion euros and then to 7.15 billion euros last month.
The overwhelming majority of Portugal Telecom shareholders, 74 percent, voted to accept that offer but the Portugal's socialist government used its "golden share" in Portugal Telecom to block the offer.
Portuguese media reported that Lisbon may accept the latest bid as the higher offer could allow Portugal Telecom to buy a stake of between 20 and 25 percent in Oi, another Brazilian phone company.
Both Telefonica and Portugal Telecom see fast-growing Brazil as a key market as they face stagnant growth in their domestic markets.
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