AM to submit new approval request for Telefonica deal as first is rejected

22 May 2019

El Salvador’s Superintendence of Competition (Superintendencia de Competencia, SC) has rejected an application from Mexican group America Movil (AM) seeking approval for the acquisition of Telefonica’s local mobile unit. In a statement, the antitrust body said AM’s application was ‘inadmissible’ but revealed that the Carlos Slim-backed firm would submit a new authorisation request. The SC will then perform a new technical, legal and economic analysis of the proposed transaction, in order to evaluate the possible effects on competition in the market.

As previously reported by CommsUpdate, in January 2019 Spanish telecoms giant Telefonica agreed to sell its businesses in Guatemala and El Salvador to AM for USD333 million and USD315 million, respectively. Telefonica Moviles Guatemala and Telefonica Moviles El Salvador (Movistar) are controlled by Telefonica Centroamerica Inversiones, a company which is owned by Telefonica (60%) and Corporacion Multi Inversiones (40%). Both parties are selling their stakes, meaning that AM is looking to acquire 100% of the Guatemalan business and 99.3% of the Salvadoran cellco. The closing of the sale of Telefonica Guatemala took place that same month, while the El Salvador deal is subject to certain customary closing conditions, including regulatory approval.