America Movil SAB de CV (ADR) (NYSE:AMX), the dominant telecom in Mexico is looking to sell off some of its Mexican assets as new antitrust regulations force it to divest itself of some its market leading position. Michelle Caruso-Cabrera reported on the news yesterday on CNBC.
“I can confirm that America Movil of Mexico is looking to sell, has begun the process of trying to sell assets. They’ve hired Bank of America as their bankers, I can confirm that, and additionally they have reached out to potential suitors such as AT&T, Bell Canada, and also Chinese telecom companies. What is also clear is that they’re looking for potentially a higher valuation than what’s originally been reported; perhaps as much as eight times EBITDA, or $20 billion” Caruso-Cabrera said.
The move comes as Mexican regulators have introduced stronger antitrust rules in response to America Movil SAB de CV (ADR) (NYSE:AMX)’s dominant position in the Mexican market, with control of 70% of the mobile industry, and 80% of the landline industry in the country.
America Movil SAB de CV (ADR) (NYSE:AMX)’s assets up for sale have been valued at $17.5 billion, and include their infrastructure spanning a number of states along Mexico’s east coast. As Caruso-Cabrera reported, America Movil SAB de CV (ADR) (NYSE:AMX) is seeking a premium on their assets, as the purchaser will have the potential to grow in a market that is itself on of the fastest growing in the world. They’ll also have the comfort of knowing that the market’s biggest competitor, America Movil SAB de CV (ADR) (NYSE:AMX) themselves, will be restricted from further growth beyond 50% market share as per the new regulations.
America Movil SAB de CV (ADR) (NYSE:AMX) meanwhile has been making a stronger push abroad as it reaches its limits within Mexico. The company recently took a majority stake in Telekom Austria AG, and is planning to make a joint bid with Oi SA for the Brazilian wireless unit of Telecom Italia SpA.
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