America Movil is to buy a 21 per cent stake in Telekom Austria (TA) from investor Ronny Pecik, indicating the Mexican billionaire Carlos Slim's determination to gain a foothold in Europe.
Slim's America Movil will purchase 5 per cent of TA's share with a commitment to acquire 16 per cent later this year following approval from the Austrian regulator. The financial terms were not disclosed, according to Bloomberg, but based on TA's closing price late last week a 21 per cent stake would command a price of €748 million.
Pecik, whose TA shareholding is held together with Egyptian billionaire Naguib Sawiris, told Bloomberg that the two shareholders had made a "nice profit" from the transaction. "Everyone is happy," Sawiris said.
Slim's move into Europe will give his Latin American-focused business exposure to TA's operations in Belarus, Bulgaria, Croatia, Liechtenstein, Macedonia, Serbia and Slovenia in addition to TA's domestic network.
However, Austrian regulations limit ownership of infrastructure companies by non-Europeans, and a new clause states that holdings of 25 per cent or more require approval by the Austrian Ministry of Economics.
This, according to Dominik Klarmann, an analyst at HSBC Trinkaus & Burkhardt, will likely stop Slim from looking to take control of TA.
"We see no indication that the state is willing or in need to sell its stake," Klarmann told Bloomberg. America Movil "could be taking advantage of attractive valuations" and "targets operating in countries that present less economic risk."
The Austrian government holds more than 28 per cent of TA's shares via the state holding company, OeIAG.
Markus Beyer, OeIAG's chairman, told the Financial Times that America Movil was an excellent strategic partner for TA, and orientated towards the long term.
"This investor is a financially and strategically excellent company with long term strategic interests particularly in the Middle East and Eastern Europe," said Beyer.
Senior execs from France Telecom and Iliad welcomed Slim's arrival in Europe in interviews at the Reuters Global Media and Technology Summit. "Slim knows that these assets are at low valuations since he knows the telecom business," said Thomas Reynaud, CFO at Iliad, the owner of France's Free Mobile.
For more:
- see this Bloomberg article
- see this Reuters article
- see this Financial Times article (reg. req.)
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