Tele­fon­ica eyes po­ten­tial deal in Mex­ico

Viet Nam News - - Markets -

MADRID —- Spain’s Tele­fon­ica is in talks over a pos­si­ble deal in Mex­ico, where it has been eye­ing ac­qui­si­tions for months to strengthen its po­si­tion against for­mer mo­nop­oly Amer­ica Movil, the tele­coms group said yes­ter­day.

The Span­ish firm said it had not reached any agree­ment. Sources close to the group said any deal was not likely to be im­mi­nent.

Ear­lier yes­ter­day web­site El Con­fi­den­cial, cit­ing un­named sources close to the talks, had re­ported Tele­fon­ica was close to ac­quir­ing Mex­ico’s third largest wire­less tele­coms com­pany Iusa­cell, worth up to 3 bil­lion eu­ros (US$4 bil­lion).

Tele­fon­ica de­clined to com­ment specif­i­cally on whether it was ne­go­ti­at­ing an ac­qui­si­tion of Iusa­cell.

Tele­fon­ica has about 20 per cent of Mex­ico’s cell­phone mar­ket while Iusa­cell has about 8 per cent, well be­hind Amer­ica Movil, which has about 70 per cent.

But Amer­ica Movil said ear­lier this month it was ready to di­vest as­sets in an un­prece­dented step to cut its mar­ket share below 50 per cent in re­sponse to the tough­est bat­tery of reg­u­la­tions in over 20 years, fu­elling com­peti­tors’ hopes that the mar­ket would be­come more com­pet­i­tive.

An­a­lysts how­ever said a po­ten­tial tieup be­tween Tele­fon­ica and Iusa­cell, while pos­i­tive, would not dras­ti­cally change mar­ket con­di­tions in Mex­ico, which ac­counts for just around 1 per cent of the Span­ish firm’s core profit. —

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