Latin American telecom titan America Movil’s (AMX) proposed consolidation plan has been reportedly approved by the shareholders. The deal has already received green signal from Mexico’s antitrust regulator “Cofeco” in February 2010. Cofeco stated that the merger will not significantly impact domestic competition.

America Movil, which is controlled by the world’s richest man Carlos Slim, is planning to acquire its sister companies, Mexican wireline operators Carso Global Telecom and Telmex Internacional (TII) or Telint. America Movil is consolidating to strengthen its position in the fiercely competitive Mexican wireless market.

Mexico-based landline operator Carso Global Telecom is the holding company of Telint and Mexico’s incumbent fixed-line carrier Telefonos de Mexico (TMX) or Telmex, both owned by Carlos Slim. Telint (spun off from Telmex in 2008) operates in multiple Latin American countries and markets triple-play (voice, data and video) services.

As per the deal, America Movil will offer 2.0474 shares of its stock for every one share held in Carso Global Telecom. The Mexican operator will get a 60.7% stake in Telint and an indirect 59.4% stake in Telmex, which are currently held by Carso Global Telecom.

America Movil will subsequently offer 0.373 shares or MXN11.66 ($0.92) in cash for each Telint share to buy the remaining 39.3% stake in the entity. Carso Global Telecom and Telint will be de-listed from the markets where they trade following the closure of the transactions. While America Movil will integrate Telint, Telmex would retain a separate management structure and will operate independently.

The proposed merger, if successful, will make America Movil a full-service provider enabling it to offer converged wireless, wireline voice, broadband and video services to over 250 million subscribers.

Besides offering significant operational synergies, the deal will provide the carrier an opportunity to market triple and/or quadruple-play bundled services across 18 countries. Moreover, it will make America Movil a telecom powerhouse strongly positioning it against its major rival Telefonica (TEF) and emerging competitors including Mexico’s largest media company Grupo Televisa (TV).

Zacks Investment Research

1. (AMX) America Movil Ruling ExpectedMexico’s antitrust regulator “COFECO” is expected to rule on America Movil’s (AMX) $21 billion proposed...
2. (AMX) America Movil Misses Earnings EstimatesLatin American telecom giant America Movil (AMX) reported results for fourth-quarter 2009 with earnings per...
3. (AMX) Is America Movil Consolidating?In an effort to consolidate its position in the fiercely competitive Mexican wireless market, Latin...
4. (TV) Grupo Televisa Eyeing Mobile OpportunityGrupo Televisa SA (TV), the largest media company in the Spanish-speaking world, is likely to...
5. (AMX) Mexico Sets Spectrum Auction RulesThe Mexican government has finally announced the bidding rules to kick off the upcoming wireless...
6. (AMX) America Movil Tops Forecasts – Subscriber Growth DipsAmerica Movil (AMX) reported results for third-quarter 2009 with earnings per ADS of 86 cents...

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