Mexican Companies Alfa And Axtel Agreed To Merge

Mexican Companies Alfa And Axtel Agreed To Merge

Mexican modern conglomerate Alfa said on Thursday it would purchase a majority stake in telecom’s company Axtel so as to better adversary Carlos Slim’s America Movil, which rules Mexico’s fixed-line phone market.

Alfa, which is consolidating Axtel with its Alestra unit, will possess 51 percent of the new company once new shares are issued. Axtel will remain exchanged on Mexico’s stock trade, the two firms said in a joint articulation.

The merging and acquisition announcement did exclude financial terms for the deal.

Together, Alestra and Axtel will have a fixed-line market share of under 6 percent, as indicated by controller measurements, a prevailing’s tenth player Slim’s America Movil.

Thomson Reuters data indicates Axtel has a market capitalization of $590 million and obligation of some $544 million, as indicated by its latest results.

Alestra reported sales of $97 million for the second quarter of this current year, while Axtel had income of some $150 million.

The new firm is relied upon to have sales in the request of 14 billion pesos to 14.5 billion pesos ($828.4 million to $858 million) a year, Alfa’s advancement executive Alejandro Elizondo told Reuters, including that he anticipated that the companies would be completely integrated inside of two years.

An Axtel representative did not promptly react to a solicitation for input.

The merger takes after a clearing change to Mexico’s telecoms division to goad rivalry and control the force of multi-billionaire Slim, whose America Movil has somewhere in the range of 70 percent of Mexico’s portable market and more than 60 percent of fixed business.

The telecom change has raised weight on littler players to combine, and the Axtel purchase takes after the securing by U.S. titan AT&T Inc of Mexico’s third-and fourth-biggest bearers Iusacell and Nextel over the previous year.

Alvaro Fernandez Garza, chairman of Alfa and Tomas Milmo Santos, Axtel’s Chairman will be co-presidents of the merged firm and will settle on choices by common assention. Rolando Zubiran Shetler, chairman and CEO of Alestra will be announced as chief executive of the merged firm once the exchange is finished.

The merger, that is still subject to administrative approbation, is relied upon to close toward the end of 2015 or the start of 2016. ($1 = 16.8995 Mexican pesos) (Reporting by Anna Yukhananov and Tomas Sarmiento, extra reporting by Christine Murray in Mexico City and Gabriela Lopez in Monterrey; Editing by Diane Craft and Cynthia Osterman).

October 2nd, 2015 by