Sponsored By

Telefónica Buys BellSouth LatAm OpsTelefónica Buys BellSouth LatAm Ops

Telefonica will acquire 100% of BellSouth's cellular operations in Latin America for $5.85M, adding 10 companies in 10 countries

March 8, 2004

2 Min Read
Telefónica Buys BellSouth LatAm Ops

MADRID, Spain -- Telefonica, the world's sixth largest telecommunications company, has reached an agreement with BellSouth to acquire all its cellular assets in Latin America, which have a total of more than 10.5 million customers.

With the transaction, still subject to due diligence and the pertinent regulatory and governmental approvals, Telefonica will strengthen its leadership in Latin America, where it manages 21.6 million fixed lines and nearly 41 million wireless customers.

Telefonica's executive chairman Cesar Alierta expressed his satisfaction over the agreement, saying, "it is in line with the Company's policy of profitable growth, it creates shareholder value and adds a new potential market of nearly 90 million customers for the Group."

Price and financing of the transaction

Under the signed agreement, the transaction values 100% of the companies acquired (firm value) at 5.850 million US dollars and will be financed from cash generated by Telefonica Moviles and debt. Telefonica and its mobile subsidiary shall both maintain solid credit ratios. Telefonica Moviles will assume the companies' net debt and it will acquire the shareholdings of BellSouth, offering minority shareholders the possibility of selling their stakes for an identical price. The acquisition in each country is subject to the respective regulatory approvals.

This agreement will bring Telefonica's customer base to well over 100 million customers worldwide, with an active presence in 14 countries in Latin America, making it the leader in both fixed and mobile telephony, with a 40% share of the Spanish- and Portuguese-speaking and 35% of the Latin American cellular markets.

Meanwhile, Telefonica Moviles' total customer base will increase to 62.5 million -- 41 million in Latin America -- cementing its leadership position in the Spanish- and Portuguese-speaking market and making it the fourth largest wireless operator in the world.

For Antonio Viana-Baptista, chairman of Telefonica Moviles: "The operation not only reinforces our position in key markets, it also generates opex and capex synergies with an estimated present value of 1,000 million US dollars and will bring compelling benefits for customers and shareholders."

Telefònica Mòviles SA

BellSouth Corp.

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like