Having met its target net debt level for the year, Spain’s Telefonica is willing to consider merger, acquisition and network-sharing opportunities in the competitive Mexican market, COO Jose Maria Alvarez-Palette has said.
Speaking at an industry…
Having met its target net debt level for the year, Spain’s Telefonica is willing to consider merger, acquisition and network-sharing opportunities in the competitive Mexican market, COO Jose Maria Alvarez-Palette has said.
Speaking at an industry conference in Barcelona, Alvarez-Palette was quoted saying the company is “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, noting that Mexico is among the Spanish telco’s top five markets.
Earlier this month, news emerged that Telefonica has mandated Santander and BBVA to explore acquisition opportunities for Mexican unit Mobistar, the nation’s second-largest wireless operator behind Carlos Slim’s America Movil (AMX).
Talks have reportedly been held with a number of potential companies. However Iusacell – Mexico’s third-largest operator with which Telefonica already shares infrastructure – is considered the most likely target. Other potential targets reportedly include DTH and cable giant Televisa and triple-play operator Megacable, although their owners are said to be reluctant to sell.
The Spanish incumbent has recently hit its net debt target after a period of refinancing and asset sales, and is now looking for growth opportunities in its core markets. There has been considerable speculation that Telefonica’s agreement to gradually increase its stake in Telecom Italia’s main shareholding vehicle, Telco, might eventually lead to a merger between the Spanish and Italian incumbents’ Brazilian units. TI CEO Marco Patunao was quoted at the same conference saying his company would consider selling TIM Brasil for the right price.
Telefonica CFO Angel Vila reportedly said at the conference that his company has been impressed by Patuano’s work since he started as CEO in October. Telefonica believes TI’s new three-year strategic plan will create value for shareholders, he added.
However, he noted that the company does not intend to boost its indirect stake in Telco to more than 14%, adding that the recent agreement between itself and other investors in the holding vehicle prohibits it from making a full takeover bid for Telecom Italia.
