Japanese telco Softbank is reportedly reviewing a potential bid for America Movil’s (AMX) Mexican wireless assets. The company has mandated Marcelo Claure, CEO of Softbank-controlled US carrier Sprint Corp, to gather information on the assets put up…
Japanese telco Softbank is reportedly reviewing a potential bid for America Movil’s (AMX) Mexican wireless assets.
The company has mandated Marcelo Claure, CEO of Softbank-controlled US carrier Sprint Corp, to gather information on the assets put up for sale by the Mexican incumbent, according to the Wall Street Journal citing people familiar with the situation.
Softbank did not respond to a request for comment, while AMX declined to comment.
Earlier reports had already suggested that Softbank is interested in the assets, estimated to be worth between US$15bn at US$17.5bn.
Other potential bidders reportedly include US telco AT&T− which recently said it would not dismiss M&A opportunities in Mexico and other parts of Latin America − Bell Canada and China Mobile.
Since July, AMX, which controls 70% of the Mexican mobile market and 80% of the fixed-line segment, has been required to sell some assets to lower its market share in compliance with changes to the country’s telecoms laws. The operator is also planning to spin off its tower assets.
Ari Lopes, principal analyst at Ovum Research, believes the Mexican government would welcome a Softbank’s bid for these assets, as it could show that the legal changes are already bringing positive impacts in the local market via the entrance of a new competitor.
Although Lopes does not expect any major regulatory issues in a potential deal with Softbank, he also noted that the Mexican regulator IFT has required AMX to sell the assets to a fully independent company.
Although Tracfone Wireless, a US-based subsidiary of AMX, has an MVNO agreement with Sprint, this would probably be considered as a “regular supplier-customer relationship”, he said.
In his opinion, a potential deal will not bring many synergies apart from a possible agreement between Softbank and AMX to use part of the latter’s infrastructure to run the new company in Mexico, at least initially.
Softbank has been linked to a number of potential deals since abandoning plans in August to acquire the US’ fourth-largest operator, T-Mobile US, after regulatory approval appeared increasingly unlikely.
Shortly after, it appointed Bolivian American national Marcelo Claure, who founded and headed Softbank’s mobile phone distributor Brightstar, as Sprint CEO.
Although Claure is reportedly very knowledgeable about Latin American markets, any potential deal would be negotiated between Softbank and AMX and would probably not involve Sprint, the Wall Street Journal cited the sources as saying.
The move would be consistent with Softbank’s aggressive expansion strategy of late, which is aimed at turning the Tokyo-based telco into a US$2trn company by 2040.
Earlier this week, the company agreed to pay US$627m to become the largest shareholder in Indian e-commerce company Snapdeal, kick-starting its planned US$10bn investment in the Indian e-commerce sector over the next decade.
In the last month, Softbank also announced plans to invest US$250m to create a joint venture with US-based media giant Legendary Entertainment, snapped up Korean online video service DramaFever for an undisclosed sum, and agreed to lead a US$100m investment in Indonesian e-commerce firm Tokopedia.
In September, it booked a US$4.6bn gain following the record-breaking IPO of Alibaba, in which it has kept a 32% stake. In 2000, the telco invested US$20m in the Chinese e-commerce company. Its holding is now valued at approximately US$77.5bn.
