América Móvil buys Telefónica assets

América Móvil buys Telefónica assets

M&A Telecoms Mexico El Salvador Guatemala Europe

The Mexican telecommunications company América Móvil said it has agreed to buy Telefónica's businesses in Guatemala and El Salvador.

América Móvil will pay $648m in total, split between $333m for 100% of Telefónica Guatemala and $315m for 99.3% of Telefónica El Salvador.

The Mexican company, owned by Carlos Slim, has closed the deal in Guatemala, but it is still waiting for regulatory approval in El Salvador, América Móvil said in a statement.

Telefónica owned 60% of Telefónica Centroamérica Inversiones, which held the two businesses, while the Guatemalan agro-industrial group Corporación Multi Inversiones (CMI) had 40%. 

Shares in América Móvil dropped 1.52% to MXN14.92 ($0.78) after the announcement, while shares in Telefónica went up 0.05% to €7.73 ($8.74).

América Móvil already operates the Claro mobile phone carrier in Guatemala and El Salvador, along with Costa Rica, Honduras, Nicaragua, Panama and nine other countries in Latin America.

Telefónica is looking to earn €2.5bn from asset sales in Central America and Mexico as it comes out from under €42.6bn in debt. The Madrid-based telecommunications company could still sell its businesses in Nicaragua and Panama.

The US law firm Latham & Watkins said it advised Telefónica on the sale.