America Movil, owned by billionaire Carlos Slim (pictured), is planning to use Telekom Austria – soon to fall under its control – as a base from which to make deeper incursions into Europe.
“There came a point where we felt there was just not very much more to be done in terms of expansion in the Americas,” Garcia Moreno, America Movil’s CFO, told a news conference (quoted by Reuters).
Telekom Austria already has a presence in seven central and eastern European countries outside its domestic market, but Moreno said America Movil would consider making purchases beyond the Austrian incumbent’s footprint.
This week, America Movil, which already owns 27 per cent of Telekom Austria, struck an agreement with state-owned OIAG (which holds 28 per cent) to take control of the Austrian incumbent.
Under Austrian law they now must make a bid for the remainder of Telekom Austria’s shares.
America Movil, reports the Financial Times (FT), said it would vote for – and participate in – a Telekom Austria rights issue to give the company a capital increase of around €1 billion. The money is to be invested in Telekom Austria’s domestic and international businesses.
A substantial pot of money has also been set aside by America Movil – as much as €1.4 billion, says Reuters – to buy out minority shareholders in the mandatory public offer.
America Movil previously tried to take control of Dutch telecoms group KPN, in which it holds a minority stake, but came unstuck by a shareholder advisory group.
The Austrian state, however, has turned out to be more welcoming. When news broke of the deal between OIAG and America Movil, Rudolf Kemler – the head of OIAG – was quoted in the FT as saying the arrangement would pave the way for “massive future growth”.
“The aim is to make Telekom Austria an important player in the European telecoms market, as well as actively considering the interests of [Austria as a] business location,” he said.