America Movil looks to take full ownership of Telmex
02 August 2011 | Kavit Majithia
Carlos Slim, the world’s richest man, has moved to integrate his telecoms business further after his flagship telecoms company America Movil made an offer to acquire a 40% stake in fixed-line operator Telmex.
In a bid reportedly worth $6.5 billion, it would add to America Movils existing 60% stake in Telmex, and give the company 100% ownership in the Mexican fixed-line operator. Slim aggressively began targeting the consolidation of his telecommunications holdings last year when America Movil acquired Telmexs international arm and increased its stake in Telmexs holding company Carso Global Telecom, in a deal worth approximately $23 billion.
A company statement issued yesterday declared: With this transaction, America Movil, a competitive and strong publicly traded Mexican corporation will be in a position to provide better conditions and more advanced telecommunications services to its customers in Mexico.
Slim is proposing a significant change in the way Telmex operates if he is successful in his bid to take full ownership - including delisting the company from the markets it trades in. The Financial Times reports America Movil sees Telmex as having limited value as a stock and there is little interest in it as equity.
The proposed deal could be hit by regulation - an area in which Slim is facing increasing pressure. America Movils mobile arm Telcel, which has 70% of mobile subscribers in the region, was fined $1 billion in April because of high mobile termination rates. Regulators considering approving this deal will be wary of Slims increasing dominance in the telecoms market, with Telmex also holding 78% of the fixed-line market.
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