AT&T to acquire Mexico's Iusacell for $1.7 billion
By Marina Lopes and Elinor Comlay
WASHINGTON/MEXICO CITY (Reuters) - AT&T Inc agreed to pay $1.7 billion to acquire Mexico's third-largest wireless operator, Iusacell, as it seeks to grab a slice of a market with lower cellular penetration than the United States and faster potential growth.
Mexico's government earlier this year implemented reforms to shake up its telecom and broadcast market by weakening the dominance of broadcaster Grupo Televisa and billionaire Carlos Slim's cellphone and fixed-line company America Movil.
AT&T is looking to tap into the growing cellphone market in Latin America's No. 2 economy now that the government is encouraging foreign investment in the sector, Chief Financial Officer John Stephens told Reuters.
"Our focus in investing in Mexico is about the great environment from an investment perspective, the regulatory reforms, the growing population and middle class," Stephens said.
AT&T shares were up 0.57 percent at $35.11 in after hours trading.
The deal, which is subject to approval by Mexican regulators, will occur after Iusacell's owner, billionaire businessman Ricardo Salinas' Grupo Salinas, buys out its partner's 50 percent stake in Iusacell.
Iusacell said in September it would buy back that stake, currently held by broadcaster Grupo Televisa, for $717 million.
"Once we reached that agreement, we started...talking to several companies," said Grupo Salinas executive Luis Nino de Rivera. "One of them was AT&T. We initiated the discussions because we were interested in making good on the next step that we had to find for Iusacell." Continued...