Spanish giant Telefónica has admitted that it is brokering a potential deal in Mexico following the publication of a report in El Confidencial saying it was close to a takeover of mobile operator Iusacell.
In a notice to the market this morning,…
Spanish giant Telefónica has admitted that it is brokering a potential deal in Mexico following the publication of a report in El Confidencial saying it was close to a takeover of mobile operator Iusacell.
In a notice to the market this morning, Telefónica said: “In relation to the news published today with regard to Mexico, Telefónica states that there is a negotiating process, not having reached any agreement in this regard.”
Telefónica is reportedly looking to merge its Mexican mobile business Movistar, the second-largest in the country, with number three operator Iusacell, which is owned 50-50 by Grupo Televisa and TV Azteca.
Telefónica would pay an enterprise value of between €2.5bn and €3bn for Iusacell and is nearing a deal after agreeing an exchange ratio with the target’s owners, according to the El Confidencial report, which cites sources close to the talks.
Negotiations are reported to have been taking place for the past eight months and Lazard is said to be Telefónica’s adviser.
Should Telefónica successfully acquire Iusacell it would then have around 26 million mobile customers.
The news comes as Mexico’s telecoms market is in a state of flux. The Enrique Peña Nieto-led government has signed reforms into law designed to force the breakup of dominant incumbent América Móvil, which has 70% of mobile subscribers.
Earlier this month América Móvil announced plans to offload subscribers and infrastructure to meet the requirements of the new telecoms regulations.
It is expected to divest at least 20 million mobile subscribers to take its market share below the 50% threshold and hopes to sell to a single, well-capitalised buyer from abroad.
