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Mexico Regulator OKs Slim Tie-Up, Televisa Buy Plan
 Tomas Sarmiento & Noel Randewich - Reuters
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February 12, 2010
Mexico City - Mexico's competition regulator approved on Thursday tycoon Carlos Slim's plan to consolidate his fixed-line and wireless assets, a major step in creating a Latin American telecommunications behemoth.
Slim launched a $21 billion proposal in January to shift control of his Mexican fixed-line operator Telmex and regional fixed-line operator Telmex Internacional into his flagship America Movil cellphone company.
As competition in Latin American telecommunications increases, Slim wants to integrate his companies to create a provider with fixed-line telephone, mobile and Internet services across Latin America to better challenge rivals.
Shares of America Movil gained 1.44 percent to 28.94 pesos ahead of the decision.
Also on Thursday, the regulator approved a proposal by media group Televisa, which dominates Mexico's television industry and is a growing competitor against Slim's companies, to acquire up to 40 percent of NII Holdings' wireless phone operator Nextel Mexico.
Mexican media have reported that Televisa, which has said it wants to expand into cellphone services, taking on America Movil, would look to pay at least $1 billion for a stake in Nextel Mexico.
Regulators have struggled for years to reduce the dominance of Slim's America Movil and Telmex in Mexico's telephone industry, often battling in court.
Announcing its ruling, the commission said that, since Telcel, which is America Movil's Mexican unit, and Telmex are both controlled by Slim, their financial consolidation would not change competitive conditions in Mexico's telecommunications industry.
"The combinations Telmex-Telcel and Televisa-Nextel do not affect markets or represent a risk to competition," the regulator said.
Under Slim's proposal, Telmex, which has about 80 percent of Mexico's fixed-line market, will be controlled by America Movil, which has more than 70 percent of the country's wireless market, but the two companies will remain separate entities.
America Movil plans to absorb Telmex Internacional completely, with fixed-line and Internet services in Brazil and other parts of South America, and eventually delist it from the stock market. Telmex would continue to trade on the stock market.
America Movil said in a statement it would continue steps to complete the consolidation, which is subject to regulatory approval in other countries.
The green light from the competition watchdog increases expectations Slim could soon give details about the savings he sees from tying up the companies.
America Movil has said consolidating the companies would allow it to take advantage of new technologies, but Slim told reporters last month the tie-up of his telecommunications assets will not lead to bundles combining fixed-line and wireless in Mexico.
(Reporting by Noel Randewich and Tomas Sarmiento; editing by Andre Grenon)
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