America Movil to Make Bid for Telekom Austria -- Update

By Anthony Harrup 

MEXICO CITY--Mexican telecommunications heavyweight América Móvil SAB said Wednesday it will make a bid to acquire outstanding shares in Telekom Austria after reaching a shareholder pact with the Austrian carrier's largest shareholder, government holding company Österreichische Industrieholding AG.

The agreement cements the move into Europe by Mexican billionaire Carlos Slim, whose company bought minority stakes in 2012 in Telekom Austria and Royal KPN of the Netherlands.

América Móvil sees in Europe an opportunity for geographic diversification, having exhausted its acquisition possibilities in Latin America, where it's the largest mobile phone provider and faces growing regulatory pressures in a number of markets including Mexico.

Telekom Austria confirmed the agreement between América Móvil and ÖIAG, but gave no details.

ÖIAG holds over 28% of Telekom Austria, and América Móvil owns around 27%. By forming the agreement, the two own over 30%, triggering a mandatory takeover bid for Telekom Austria under Austrian law. At the offer price, the remaining shares of Telekom Austria would cost América Móvil more than 1.4 billion euros.

América Móvil said that through its unit Carso Telecom, it will make an offer for all outstanding shares of Telekom Austria that aren't owned by ÖIAG or by itself, at 7.15 euros per share. América Móvil said it would "obtain operational responsibilities" in Telekom Austria, without giving further details.

ÖIAG said late last month that any syndicate agreement would ensure Telekom Austria's headquarters remain in Austria over the long term, and that ÖIAG's stake isn't watered down to below 25% plus one share.

América Móvil said that it and ÖIAG agreed to support a 1-billion-euro capital increase at Telekom Austria, which will strengthen its capital structure and finances, allowing the company to invest in infrastructure, research and development, and to take advantage of investment opportunities in emerging markets in central and Eastern Europe.

América Móvil Chief Executive Daniell Hajj said in a release that the partnership "provides the basis for future growth, continued innovation, and solid investment in Telekom Austria."

América Móvil's takeover bid for KPN last year was unsuccessful.

Nicole Lundeen in Vienna contributed to this article

Write to Anthony Harrup at [e-mail]

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