Mexico merger set to create LatAm giant - Mobile World Live

Mexico merger set to create LatAm giant

15 JAN 2010

Mexican billionaire Carlos Slim has moved to merge his telecoms assets in Latin America in a bid to create a giant integrated mobile and fixed-line operator. Slim’s America Movil – Latin America’s largest mobile operator by subscribers – announced yesterday it was planning to acquire Telmex, Mexico’s leading fixed-line operator, and Telmex International, which provides similar services across Latin America. Both fixed-line businesses are also owned by Slim. “With this consolidation, the company will be able to offer integrated communications services in the region, independent of the platform on which they are generated,” the company said in a statement. America Movil is looking to make the deal via an all-stock offer for Carso Global Telecom, a holding company that controls both Telmex and Telmex International. If Carso Global Telecom’s shareholders tender all their shares, America Movil would indirectly own 59.4 percent of Telmex and 60.7 percent of Telmex International. The deal remains subject to regulatory approval.

The deal is expected to create an integrated operator with around 250 million subscribers. A Financial Times report notes that the combination of the businesses will allow it to sell “triple-” and “quadruple-play” bundles of services (mobile, fixed-line, Internet, TV). It is also considered a strategy that will strengthen America Movil’s position against Latin American rivals such as Spain’s Telefonica and new entrants into the region such as Vivendi (which has recently entered Brazil). Carlos Garcia Moreno, America Movil’s finance director, told Bloomberg that taking over Telmex International would also enable it to reduce costs: “To maintain our competitiveness going forward in the medium and long term, it is of the essence that we end up running an integrated operation,” he said.

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