America Movil unveils plan to consolidate Carso Global Telecom and Telint

14 Jan 2010

Mexican mobile group America Movil (AM), which is controlled by one of the world’s richest men, Carlos Slim, has announced that it plans to consolidate both of the businessman’s other telecoms companies – Carso Global Telecom and Telmex Internacional (Telint) – with a view to creating a regional telecoms giant offering fixed line, wireless and broadband services, to more than 250 million subscribers.

According to Reuters, AM has said that it will initially offer 2.0474 AM shares for every share held in Carso Global, which if accepted would give it an indirect 59.4% stake in Mexican fixed line incumbent Telefonos de Mexico (Telmex) and 60.7% in Telint, which has a number of Latin American fixed line subsidiaries in countries including Brazil, Argentina and Colombia. Subsequently AM will then offer any remaining shareholders 0.373 AM shares, or MXN11.66 (USD0.92) in cash, for each Telint share as it looks to acquire the remaining 39.3% in the fixed line group. Upon completion of both of these acquisitions it is then understood that AM will delist both Carso Global and Telint from the markets on which they trade, and while AM would absorb Telint, Telmex would retain a separate management structure.

The move comes as Telmex has struggled to compensate for increasing levels of competition from mobile services, and Slim is thought to believe that the consolidation of all three companies will create a provider better equipped to challenge its rivals not just in Mexico, but across Latin America. Arturo Elias Ayub, a spokesman for Slim, noted that the proposed transactions require a number of approvals, including that of the Comision Federal de Competencia (Cofeco), Mexico’s antitrust regulator, adding: ‘This is a company that is going to offer triple- and quadruple-play services in 18 countries.’