The Mexican competition authority has said that it could potentially approve Grupo Televisa’s acquisition of a 50% stake in mobile operator Iusacell if the companies make commitments that resolve competition concerns.
In a statement, the Federal…
The Mexican competition authority has said that it could potentially approve Grupo Televisa’s acquisition of a 50% stake in mobile operator Iusacell if the companies make commitments that resolve competition concerns.
In a statement, the Federal Competition Commission (CFC) confirmed that it was blocking the US$1.6bn deal in its current form, which would have seen Televisa sharing control of Iusacell with its current owner, the conglomerate Grupo Salinas.
But the regulator added that, if the parties present additional commitments for the deal, these would be assessed. If those commitments resolved competition concerns, the deal could still be approved.
The CFC argued that while the deal could have beneficial effects on competition in the mobile market, it posed “grave risks” for competition in the television market, where Televisa competes with another Grupo Salinas subsidiary, TV Azteca.
The regulator said that if the price of TV advertising went up as a result of less competition in the market, those price increases might be passed on to consumers.
The CFC did argue that the proposed deal could create “more vigorous competition” in the mobile market.
But the CFC added that the proposed deal was not the only way of getting these benefits. It suggested other possibilities, like Iusacell receiving a cash injection from a company that was not one of Grupo Salinas’s main competitors in other markets, or through a shareholder structure that did not induce cooperation between competitors.
“The benefits in one market cannot serve to justify damage to competition in other markets,” the regulator said.
Bloomberg reported that Iusacell and Televisa are planning legal filings to ask the CFC to reconsider its decision.
