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América Móvil, the pan-American telecoms provider, said on Monday that it would seek to buy the remaining 40 per cent of shares in fixed-line company Telefonos de Mexico that it does not own.
The bid, which is expected to begin on Tuesday and remain open until November 11, follows approval for the deal by Mexican banking and stock market regulators on Monday morning.
Once completed, the acquisition is expected to result in the delisting of Telmex.
América Móvil started life in 2000 as a spin-off from Telmex, then its parent company. Barely a decade later, the company has a presence in 18 countries throughout the Americas and has more than 230m mobile subscribers.
América Móvil shares closed up 0.4 per cent on Monday at 14.97 pesos a share.
The purchase by América Móvil, which belongs to Carlos Slim, the world’s richest man, would complete a strategy put in place more than a year ago when the company first announced its intention to absorb Telmex.
Irene Levy of Observatel, a Mexico City-based consumer-defence organisation for the telecoms industry, said the purchase made “a lot of sense” because it would allow the company to realise administrative synergies but also to integrate the infrastructure of the two companies.
She said: “Absorbing the rest of Telmex will allow América Móvil better to realise economies of scale and to take advantage of converging technological platforms”.
In particular, experts say the absorption would help América Móvil to offer its almost 300m customers throughout the Americas bundled services of fixed-line phone, cellular phone, internet and television.
In recent years, technological convergence has led to fierce competition in Latin America between Mr Slim’s company and Telefónica of Spain as the two scramble to win subscribers. It has also brought the region’s cable TV operators into direct competition with telephone service providers.
Even so, analysts say América Móvil’s purchase of the remaining 40 per cent of Telmex will not affect Mr Slim’s attempts to gain a licence for offering television services in Mexico, his home market. The billionaire has for years met resistance from Mexican regulators, who are concerned that granting Telmex a TV licence would make him too powerful.