Telefonica SA, the biggest European telecommunications investor in Latin America, said it’s in talks over a deal in Mexico, following a report that it is seeking to buy Grupo Iusacell SA.
“Negotiations are open, although no agreement has been reached,” Madrid-based Telefonica said in a Spanish regulatory filing today, without giving further details. News site El Confidencial reported today the talks with Iusacell. Bloomberg News reported Feb. 5 that the two companies were in talks to combine their mobile-phone operations in Mexico.
A deal between Telefonica and Iusacell, the second- and third-biggest mobile carriers in Mexico, would give them most of the portion of the country’s mobile market that isn’t controlled by Carlos Slim’s America Movil SAB, which has about 70 percent market share. America Movil aims to sell assets to cut its market share to below 50 percent to meet regulatory demands, Slim said this month.
Iusacell is co-owned by Mexican broadcaster Grupo Televisa SAB and by billionaire Ricardo Salinas. The carrier, which only operates in Mexico, was valued at $3.2 billion when Televisa acquired a 50 percent stake in the company in 2012.
A press official for Televisa declined to comment on whether the company was in talks with Telefonica. A press official for Salinas didn’t immediately reply to phone and e-mailed requests for comment.
Shares of Telefonica rose less than 1 percent to 12.37 euros at 4:39 p.m. in Madrid, valuing the company at 56 billion euros ($75 billion). Televisa added 3.1 percent to 94.85 pesos in Mexico City trading, leading gains on Mexico’s benchmark IPC index.
While Mexico is the world’s most populous Spanish-speaking country, it only accounted for 2.8 percent of Telefonica’s revenue in 2013, less than Argentina, Chile, Venezuela, Peru and Colombia, data compiled by Bloomberg show.
Telefonica is scheduled to report second-quarter earnings tomorrow before markets open in Madrid.