Verizon Communications (NYSE: VZ) is not going to bid for assets that América Móvil is going to sell off, according to CFO Fran Shammo. Meanwhile, thanks to rules being put in place by Mexico's telecommunications regulators, AT&T (NYSE: T) could face hurdles if it decides to acquire some of the assets.
Shammo told the Wall Street Journal that Verizon has "no interest" in acquiring the assets. Shammo also said that Verizon is not interested in any other major deals, such as a content company or a European wireless operator. Verizon is busy digesting its $130 billion purchase of Vodafone's 45 percent stake in Verizon Wireless.
América Móvil is seeking to offload some assets as part of an effort to get its market share in Mexico below 50 percent from around 70 percent amid antitrust pressure from Mexican regulators, the Journal noted. Mexico instituted a new law in July that seeks to create more competition in the telecommunications market, especially for Carlos Slim's América Móvil.
Companies that want to bid for the assets will need to demonstrate that they are totally independent of América Móvil, according to Gabriel Contreras, the head of Mexico's telecoms regulator.
According to Bloomberg, he said that historical relationships and personal ties will also need to be probed. Bloomberg reported last month that, according to unnamed sources familiar with the matter, América Móvil contacted AT&T and Sprint (NYSE: S) parent SoftBank as potential suitors for the asset sale, which could generate as much as $17.5 billion.
At the end of June, AT&T sold its 8.27 percent stake in América Móvil for $5.57 billion to shareholders Inmobiliaria Carso and Control Empresarial de Capitales. AT&T sold the stake as part of the regulatory approval process related to its $48.5 billion acquisition of DirecTV (NASDAQ: DTV), which is still being evaluated by U.S. regulators.
"Whether there's been history or not, of course, is something we have to study," Contreras, president of the Federal Telecommunications Institute, known as IFT, said in an interview with Bloomberg. The agency would seek "to verify if it's something that subsists or not, apart from whether there have been any corporate or capital changes."
''It would be pointless if whoever serves that portion of the market responds to the same common interest, or even colludes,'' he said. To guard against that and ensure more market competition, Contreras said he would need to rule out ''overlap between board members or at management levels.''
AT&T took its two representatives off América Móvil's board when it sold its stake. However, a former executive at Slim's companies, Jaime Chico Pardo, currently serves as an AT&T board member. As Bloomberg notes, Chico Pardo was CEO of Slim's Telefonos de Mexico from 1995 to 2006, before América Móvil absorbed it. He has been an AT&T board member since 2008.
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