América Móvil completes takeover of PRT, rebrands mobile arm as Claro

2 Apr 2007

Mexican mobile heavyweight América Móvil (AM) has completed a delayed takeover of Puerto Rican holding company Telecomunicaciones de Puerto Rico (Telpri), the parent of incumbent fixed line operator Puerto Rico Telephone Company (PRT) and wireless provider Verizon Wireless PR, the latter of which it plans to rebrand under its international Claro trademark. AM bought 100% of Telpri, which was previously owned by US telco Verizon Communications (52%), the Puerto Rican government (28%), local bank Banco Popular (13%) and Telpri employees (7%). At the end of 2006 PRT had 1.022 million fixed lines in service and Verizon Wireless PR served 554,000 mobile customers.

On 27 March 2006 US telecoms regulator the FCC granted conditional approval for AM to acquire Verizon’s 52% in return for promising to invest USD1 billion in PRT’s infrastructure over the next five years. On 3 April 2006 Verizon reached an agreement to sell its stake in Telpri to AM for USD939 million, and in July 2006 AM agreed to pay USD500 million for the state-held 28% and USD199 million for Popular’s 13%, bringing the total price for a 93% stake to USD1.64 billion. The deal was originally expected to be completed by the end of 2006, but the process of obtaining US regulatory approval slowed proceedings down. AM is the first foreign company to acquire a US-controlled mobile operator in a US territory.

A separate sale of Verizon’s interests in Dominican Republic-based Verizon Dominicana to AM closed in December 2006, but a similar agreement between the two to transfer a stake in Venezuelan incumbent CANTV was scuppered by the Venezuelan government’s recent decision to re-nationalise the PTO.