Axtel close to Avantel deal, papers say

27 Sep 2006

Mexico’s largest alternative telephony operator Axtel is reportedly close to acquiring rival Avantel for USD100 million, according to BNamericas quoting newspaper El Financiero. Axtel has long been in the market to expand its business via acquisitions and mergers, and sources close to the company claim a takeover of Avantel is ‘practically done’. As part of the deal, Axtel would absorb Avantel debts of between USD300 million and USD350 million. Avantel, co-owned by domestic financial group Banamex and MCI of the US (formerly WorldCom; now part of Verizon), has struggled to make an impact in the local fixed line market, but does have a strong presence in the domestic and international long-distance sectors. According to El Financiero, Avantel has invested around USD2 billion in its networks and services since launching in 1997, but income has steadily declined from USD700 million in 2000 to USD410 million in 2005; the figure is expected to reach a low of USD385 million in 2006.

Mexico, Axtel