America Movil scrapped a deal to acquire one of Telefonica’s El Salvador units, as the operators mutually agreed to abandon the move due to regulatory hurdles.
In a short statement, America Movil said it terminated the deal to purchase a 99.3 per cent stake in Telefonica Moviles El Salvador, which was first announced in January 2019 [1].
At the time America Movil said it would spend $315 million on the acquisition of Telefonica’s Movistar entity, which operates Telefonica Moviles El Salvador and Telefonica Multiservicios.
“The decision comes after careful consideration by both parties of the conditions to obtaining regulatory approval established by the Superintendencia de Competencia in their recent ruling on the proposed transaction,” America Movil explained.
There was no clarification on whether it would still pursue the acquisition of Telefonica Multiservicios.
Tough conditions
The abandonment comes a matter of weeks after El Salvador’s competition authority set conditions to clear the deal [2].
These included a requirement for America Movil’s Claro to rule out future use of spectrum currently used by Movistar until it is certified. Claro was also pressed to keep all marketing strategies developed by Movistar for seven years.
Prior to the conditions being set, the deal faced other regulatory hurdles.
An application to complete the deal was voided by the country’s competition authority in September 2019 over a lack of required information.
[1] https://www.mobileworldlive.com/featured-content/top-three/america-movil-snaps-up-telefonica-assets
[2] https://www.mobileworldlive.com/featured-content/top-three/america-movil-sees-movement-on-el-salvador-deal
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