Mexico's Alfa to acquire Axtel

Mexico's Alfa to acquire Axtel

Mexico’s Alfa has agreed to purchase a majority stake in Axtel in a move to take on market leader America Movil.

The industrial conglomerate is said to be planning to merge Axtel with its Alestra unit. It will own 51% of the combined entity once shares are issued. No financial terms were revealed.

“The two companies are a very good fit,” Alejandro Elizondo, Alfa’s senior vice president for development, told Bloomberg. “In Axtel’s consumer area, we see very interesting opportunities in using infrastructure, all of those fibre optics, to attend to small and mid-sized companies.”

When merged, both companies will reportedly have a fixed-line market share of under 6%. The combined entity is also expected to produce sales between $828.4 million and $858 million (14 billion peso to 14.5 billion pesos) each year, according to Elizondo who plans to fully integrate the companies within two years. 

The announcement comes on the back of AT&T’s acquisition of Iusacell and Nextel, Mexico’s third and fourth largest operators, for $2.5 billion and $1.88 billion respectively.

Subject to regulatory approval, the deal is expected to be completed by early 2016. 

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