Spanish giant Telefonica is said to be in discussions with the owners of Iusacell to merge the operator with its Mexican mobile unit.
Telefonica is talking to Emilio Azcarraga and Ricardo Salinas, whose companies Televisa and Grupo Salinas each hold…
Spanish giant Telefonica is said to be in discussions with the owners of Iusacell to merge the operator with its Mexican mobile unit.
Telefonica is talking to Emilio Azcarraga and Ricardo Salinas, whose companies Televisa and Grupo Salinas each hold half of the Mexican operator, according to reports from El Economista and Bloomberg.
It is not clear which side would own a combined operator but Telefonica appears to be the more likely buyer, one of the reports said.
BBVA and Lazard are reportedly advising Telefonica on a potential deal, which could draw regulatory scrutiny.
Last year Mexico created a new, beefed-up telecoms regulator in a bid to address the dominance of America Movil (AMX), which controls 70% of the country’s mobile network.
A Telefonica/Iusacell combination could provide a stronger challenger to AMX’s monopoly, but it would mean losing one of the two operators which together make up almost all of the remaining 30% of the market.
Televisa bought into privately-held Iusacell in 2012, acquiring a 50% stake for US$1.6bn which valued the operator at US$3.2bn.
Meanwhile Telefonica’s Mexican business is reportedly valued at US$6.4bn, based on the Spanish company’s trading value of 13.9 times earnings, of which the Mexican unit represents less than 3% of.
Last November Telefonica’s COO Jose Maria Alvarez-Palette was quoted as saying the company was “very open-minded” toward consolidation in Mexico.
“We are open to deals or consolidation, since we think it makes sense and the timing is right,” Alvarez-Palette said at the time.
