Six months after selling its holding in Vivo of Brazil to joint venture partner Telefonica, Portugal Telecom (PT) re-entered the Brazilian telecom sector with an agreement to pay U.S. $5 billion for a 22.8% stake in Telemar Norte Leste, Brazil’s top-ranked fixed line operator. Telemar, which operates under the Oi brand name, is also expected to acquire a 10% stake in PT as part of the deal, which is expected to close in March. Observers have estimated the value of that stake at U.S. $1.02 billion. Although Oi derives the bulk of its revenue from wireline services, it also competes against Vivo, the largest mobile phone service provider in Brazil. A PT spokesman has described Brazil as a “geographical focus” for his company. Meanwhile, the U.S. $10.21 billion sale of PT’s Vivo stake to Telefonica last July has attracted the attention of the European Commission (EC), which announced it was investigating a related agreement in which the parties pledged to refrain from investing or participating “in any project in the telecommunications business . . . that can be deemed to be in competition with the other within the Iberian market.” According to EC officials, the purpose of the probe is to determine whether the non-compete agreement violates EC competition rules. Confirming receipt of the EC’s notice, a PT spokesman said his company stands ready to “clarify all the facts.”