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 Technology News | October 2006 
Verizon to Sell Latin American Ops
 Peter Svensson - Associated Press
| | Both Telmex and America Movil are controlled by Carlos Slim, Latin America's wealthiest man. |
Verizon Communications Inc. this week said it has agreed to sell its Caribbean and Latin American telecommunications operations, including a stake in the largest telephone company in Venezuela, to two Mexican companies for $3.7 billion.
Verizon is selling Verizon Dominicana in the Dominican Republic and its 52 percent interest in Telecomunicaciones de Puerto Rico Inc. to America Movil SA, Latin America's largest cell-phone company.
Verizon also agreed to sell its 29 percent stake in Compania Anonima Nacional Telefonos de Venezuela, or CANTV, the country's incumbent phone company, to a unit jointly owned by America Movil and its former parent, Telefonos de Mexico SA.
The America Movil-Telmex joint venture has agreed to make a tender offer for all the remaining shares of CANTV. U.S. shares of CANTV rose $1.57, or 7.4 percent, to close at $22.75 on the New York Stock Exchange.
Both Telmex and America Movil are controlled by Carlos Slim, Latin America's wealthiest man.
Verizon Chairman and Chief Executive Ivan Seidenberg said the businesses "represent a small part of our revenue base that is less aligned with our core business focus and future growth." Christopher King, analyst at Stifel Nicolaus in Baltimore, said the sales were consistent with Verizon's strategy of cleaning up its balance sheet to free up money for a build-out of fiber-optic connections to subscriber homes in the United States.
King said the deal was probably not "hugely material" to Verizon, and will probably bring its net debt level down by less than 10 percent.
Verizon shares rose 36 cents, or 1.1 percent, to end at $34.42 on the NYSE.
U.S. shares of Telmex rose 29 cents, or 1.3 percent, to close at $22.77, while U.S. shares of America Movil rose 96 cents, or 2.8 percent, to close at $35.
Verizon said shareholders of Telecomunicaciones de Puerto Rico have the right to sell their shares to the buyer at essentially the same terms as Verizon.
Combined, the units serve about 15 million wireless, wireline and broadband customers in three countries and employ about 17,000 workers.
Each transaction is subject to separate regulatory approvals, Verizon said. |
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