Mexican behemoth America Movil (AMX) has abandoned its attempt to merge Digicel’s El Salvador operations into its local Claro unit after it was blocked three times by the regulator.
In a filing with the Mexican Stock Exchange AMX said it abandoned the…
Mexican behemoth America Movil (AMX) has abandoned its attempt to merge Digicel’s El Salvador operations into its local Claro unit after it was blocked three times by the regulator.
In a filing with the Mexican Stock Exchange AMX said it abandoned the plan to acquire 100% of Digicel El Salvador.
The agreement, signed in early 2011, proposed a swap deal with AMX acquiring Digicel’s El Salvador and Honduras units and Digicel receiving AMX’s Jamaica business in return. Financial details and conditions of the deal were not disclosed.
Following AMX’s decision to cancel the deal, Digicel issued a statement: “It is business as usual for us. We see a number of growth opportunities in El Salvador which we intend to pursue.”
In a 129 page document published in late September El Salvador’s antitrust regulator, the Superintendencia De Competencia (SC), said the planned merger would create adverse market conditions and be bad for consumers.
The board of SC described Digicel as an “economic agent that injects competition”, saying its past commercial behaviour marked it out as a “maverick” enterprise.
A merger would have created one dominant player in El Salvador and meant that more than half of the country’s spectrum lay in the hands of one telco.
It was the third time SC rejected AMX, which for its part had offered remedies in an attempt to assuage the regulator to no avail.
America Movil is the biggest mobile operator in the Americas claiming 252 million subscribers, while Digicel offers services in 26 countries across the Caribbean and LatAm.
