America Movil SAB had its outlook improved to stable by Standard & Poor’s, which said the Latin American wireless carrier avoided a potential downgrade by withdrawing a $9.9 billion offer for Royal KPN NV.
America Movil’s plans to expand in Europe were thwarted last week when the company, controlled by billionaire Carlos Slim, failed to persuade the Dutch phone operator to accept its offer of 2.40 ($3.31) euros a share. Dropping the bid allows America Movil to generate cash and keep its A- rating, four levels above junk status, S&P said today.
“We will continue to monitor the company’s potential future acquisitions in Europe,” Marcela Duenas, an S&P credit analyst, said in a statement. Other possible takeovers and an increase in regulatory pressures in Mexico or other America Movil markets could trigger a downgrade in the future, S&P said.
America Movil, based in Mexico City, will maintain its rating as long as its ratio of fully adjusted debt to earnings is less than 2 times, S&P said.
Moody’s Investors Service said last week it continued to review America Movil for a possible downgrade.