America Movil launches $1.9 billion bid for Telekom Austria

Latin American telecoms giant America Movil has launched a €1.4 billion ($1.9 billion) offer for the 73% stake in Telekom Austria it does not already own.

The offer values Telekom Austria at €7.15 a share and is set to remain open for a period of eight weeks, said America Movil (Mexico City, Mexico) in a statement.

For the deal to go ahead, the offer must be accepted by shareholders currently in control of at least 50% of the outstanding shares.

The latest move by America Movil comes after Mexican billionaire owner Carlos Slim agreed a deal in April to combine his stake in Telekom Austria (Vienna) with the 28% held by the Austrian government through its OIAG investment company.

Under the terms of that deal, OIAG’s stake is not allowed to fall below 25%, but America Movil will assume operational responsibility for the group.

Slim has also said it will support a €1 billion capital increase in Telekom Austria to improve its financial position.

Telekom Austria and America Movil have also unveiled plans to develop an international fiber network and will initially work on establishing a link between Miami and Vienna, plus a back-up between Dallas and Frankfurt.

Slim has already spent about $1 billion on building up a stake in Telekom Austria since 2012, but is keen to diversify his business interests away from the Latin America region, where he has come under pressure from regulators keen to rein him in.

Having last year failed to acquire Dutch incumbent KPN (The Hague, Netherlands), the Mexican billionaire now has his sights set on taking control of Telekom Austria as an alternative.

Although Europe’s telecoms markets are highly developed, and present little obvious short-term opportunity, some commentators are optimistic about a softening of regulation in the European Union in the near future and see growth prospects in the nascent Internet of Things market.

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