Mexican billionaire Carlos Slim has agreed to buy out AT&T’s $5.6 billion stake in América Móvil, clearing a major hurdle in AT&T’s path to acquire satellite broadcaster DirecTV.
Selling stakes in America Movil was necessary for AT&T to fund its acquisition and comply with telecom regulations in Latin American countries, where DirecTV has more than 8 million Pay-TV customers.
In addition to pay-TV service, DirecTV provides mobile broadband services in Brazil and Argentina. Reports say it is preparing to introduce broadband service in Colombia. Analysts say, the new deal pits Slim’s own companies against AT&T.
Slim’s holding company, Inmobiliaria Carso, said it will acquire AT&T’s 8.3 percent stake. AT&T will receive $4.57 billion at the close of the sale and another $1 billion within 60 days of the closing.
“America Movil recognizes the great value that the AT&T partnership produced for both parties in these more than 20 years,” Slim’s company said.
America Movil made up about half of Slim’s $68.8 billion fortune, according to the Bloomberg Billionaires Index, making him the world’s second-richest person, trailing Bill Gates.
More than that of his wealth, the latest agreement sets the stage for putting an end to his monopoly on Mexican telecom industry. Analysts expect AT&T’s arrival to kick off a fierce competition in Latin America’s wireless telecom market.
Slim’s firm is already under government pressure to reduce its dominance in Mexico, where British telecom firm Virgin Mobile is about to join the race to win over new wireless customers.
For years, Slim has resisted calls to reduce his dominance of the Mexican phone industry, but now analysts believe AT&T might do what others have been unable to.