Feb. 12 (Bloomberg) — Carlos Slim’s America Movil SAB and broadcaster Grupo Televisa SA won regulatory approval in Mexico for transactions that would alter the telecommunications industry in Latin America as carriers add more services.
Mexico’s antitrust agency yesterday approved wireless carrier America Movil’s takeover of Slim’s telecommunications holding company, which will give it control of land-line phone carriers from Mexico to Peru. The agency said it also will allow Televisa to buy as much as 40 percent of wireless carrier NII Holdings Inc.’s Mexican unit to enter the mobile-phone market.
Both transactions may help the companies broaden their offerings to include wireless, home-phone, Internet and television service. Slim and his competitors in Latin America are seeking to attract and retain customers by selling all of those communications services together in a package.
“The more his assets become converged, the more pressure it puts on everyone else across the region,” said Christopher King, an analyst at Stifel Nicolaus & Co. in Baltimore. He advises buying shares of Mexico City-based America Movil and Reston, Virginia-based NII Holdings.
America Movil fell 12 centavos to 28.82 pesos at 4 p.m. New York time in Mexico City trading. Mexico City-based Televisa dropped 43 centavos to 48.22 pesos. NII Holdings rose 97 cents, or 2.8 percent, to $36.07 in Nasdaq Stock Market trading.
Televisa said in an e-mailed statement today that it hasn’t signed an agreement with NII Holdings and can’t guarantee the deal will go through. NII Holdings said in a filing with the U.S. Securities and Exchange Commission that it is aware of the antitrust agency’s decision and has no comment.
Televisa may have to pay almost $2 billion to acquire 40 percent of NII’s Mexican division, King said yesterday in a phone interview. That would give NII a supply of cash to help it buy airwaves in a planned government auction and build a new wireless network capable of high-speed Internet downloads, he said.
Televisa already offers home-phone, Internet and TV service through three Mexican cable operators it controls. If it adds wireless service through an agreement with NII, it could use the combined package to attract more customers from Slim’s Telefonos de Mexico SAB, which doesn’t offer video or mobile-phone plans.
America Movil has said its planned transaction would allow it to combine its wireless, land-line, Internet and TV services into packages throughout Latin America, except in Mexico, where the antitrust agency, the Federal Competition Commission, has declared the wireless carrier dominant.
The company announced its plan last month to gain control of Slim’s fixed-line phone companies across the region through transactions worth more than $20 billion. To complete the deal, America Movil must acquire holding company Carso Global Telecom SAB in a share swap, gaining majority control of Mexico City- based Telefonos de Mexico and South American carrier Telmex Internacional SAB.
America Movil would then offer cash or stock for the remaining Telmex Internacional shares while allowing Telefonos de Mexico to continue operating under its own strategy.
Through Telmex Internacional, America Movil would acquire control of Brazilian phone company Embratel Participacoes SA and a one-third stake in Net Servicos de Comunicacao SA, Brazil’s biggest pay-TV company, which also offers digital phone and Internet plans. Mexico City-based Telmex Internacional sells various communications services in Argentina, Chile, Colombia, Ecuador, Peru and Uruguay.
Brazil is already America Movil’s second-largest market after Mexico, with 44.4 million subscribers at the end of 2009, and led its customer growth last quarter with 2.1 million additions.
Brazil also is fueling Telmex Internacional’s growth. The company reported a 58 percent increase in fourth-quarter profit yesterday as more subscribers signed up for phone and Web service. Net income rose to 1.98 billion pesos ($153 million), and sales climbed 32 percent to 25.7 billion pesos.
–With assistance from Andres Martinez in Mexico City. Editors: Stephen West, Jerry Byrd
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