Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON
  1. Homepage
  2. Equities
  3. Mexico
  4. Mexican Stock Exchange
  5. América Móvil, S.A.B. de C.V.
  6. News
  7. Summary
    AMX L   MXP001691213

AMÉRICA MÓVIL, S.A.B. DE C.V.

(AMX L)
  Report
SummaryChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

KPN's 8 billion euros deal with Telefonica tests Europe antitrust stance

07/23/2013 | 05:22am EDT
The data center of Dutch telecoms group KPN is seen in Haarlem May 31, 2012.EUTERS/Paul Vreeker/United Photos

BRUSSELS/MADRID (Reuters) - Dutch telecoms group KPN (>> KPN KON) will sell its German unit to Telefonica Deutschland (>> Telefonica Deutschland Holding AG) for some 8.1 billion euros ($11 billion) in cash and shares, in a long-awaited deal that will test regulators' views in Europe's largest mobile market.

BRUSSELS/MADRID (Reuters) - Dutch telecoms group KPN (>> KPN KON) will sell its German unit to Telefonica Deutschland (>> Telefonica Deutschland Holding AG) for some 8.1 billion euros ($11 billion) in cash and shares, in a long-awaited deal that will test regulators' views in Europe's largest mobile market.

If KPN's disposal of E-Plus is finalized, the new company would hold a share of about 30 percent of Germany's mobile service revenue and would be better armed to take on Deutsche Telekom (>> Deutsche Telekom AG) and Vodafone (>> Vodafone Group plc), with 35 percent each.

KPN said the deal, in which it will receive 5 billion euros cash and a 17.6 percent stake in the newly merged company - which KPN valued at some 3.1 billion euros - would generate cost savings of between 5.0 and 5.5 billion euros.

For Telefonica, which has been selling assets for the past two years to cut its massive debts, the deal is a bold bet on Germany, a market where despite recent intensified competition profit margins remain high compared with Britain and Spain.

The Spanish group said it would need to raise 4.14 billion euros to finance the deal. About 3.7 billion euros will come from a rights issue at Telefonica Deutschland, to which Telefonica will subscribe for 2.84 billion.

Telefonica said it expected the deal would not affect its key net debt to core earnings (EBITDA) ratio. Roughly 50 to 65 percent of the amount it has to raise will come from hybrid debt, 20 to 30 percent from a mandatory convertible bond and the rest from incremental debt.

Rating agencies have not yet given their view on the deal.

The two companies had flagged the deal late on Monday and sources earlier confirmed to Reuters the structure and price of the combination.

"As we have said for many years, we will sell any asset for the right price," KPN Chief Executive Eelco Blok said. "For a long time people have predicted this combination would happen and we're very, very pleased that we have reached an agreement."

CROSS BORDER

The deal is the latest in a spate of acquisitions in the global telecom sector, which is reshaping the competitive dynamics of an industry struggling in Europe but flourishing in the United States and Asia where prices and profits are higher.

Vivendi (>> VIVENDI) also on Tuesday agreed to sell a controlling stake in Maroc Telecom to Gulf operator Etisalat (>> Emirates Telecommunication Corp Ltd). Japan's Softbank (>> Softbank Corp), Vodafone and cable group Liberty Global (>> Liberty Global PLC) have all done deals to bolster their operations in recent months, while Asia's Hutchison Whampoa (>> Hutchison Whampoa Limited) is seeking to consolidate the Ireland market.

Because of its size and cross-border implications, the European Commission's antitrust watchdog will closely evaluate the deal's impact on consumers and network quality in Germany.

In recent deals such as in Austria where operators sought to take markets from four to three players, regulators have demanded concessions such as spectrum divestments and pledges to offer competitive rental terms to rivals.

"In an environment where in-market consolidation has been put under intense regulatory scrutiny ... we believe such a deal would face significant hurdles in principle, even before discussing potential concessions," wrote Jefferies analyst Ulrich Rathe.

It remains to be seen why America Movil (>> America Movil SAB de CV), which has a stake of about 30 percent in KPN, decided to back the deal to sell off the German unit, the Dutch operator's crown jewel, to its arch-rival. America Movil and Telefonica compete head to head across Latin America and their bosses Carlos Slim and Cesar Alierta are old foes.

One person involved in the talks said Slim and KPN saw it as a good time to sell given E-Plus's weak position in the market and with expensive spectrum auctions looming.

UNSUSTAINABLE POSITION

"Slim and KPN know they will never get as good a price for this asset as they will get right now," the person said. "The competitive environment in Germany is getting worse ... E-Plus is in an unsustainable position in Germany: too small, too few spectrum holdings, and inability to invest to keep up with the other players."

On a conference call, KPN boss Blok refused to be drawn into explaining America Movil's position, merely adding that the Mexican group has two members on the supervisory board, which as a whole voted for the deal. America Movil has yet to make any public statement.

KPN said it would use the majority of the cash proceeds to improve its balance sheet and would restart paying a dividend for 2014.

KPN said JP Morgan, Goldman Sachs, ABN AMRO and law firm Allen & Overy were its advisors on the deal. Telefonica's advisers included HSBC and Morgan Stanley, according to people familiar with the matter. UBS was joint advisor to Telefonica Deutschland alongside Bank of America Merrill Lynch.

Telefonica said its target to cut debt to less than 47 billion euros by year-end from 51.3 billion at the end of 2012 would be unaffected by the deal.

KPN has some 24 million customers in Germany and saw its core profit decline by 30 percent in the country, adjusted for one-off items, in the second quarter as it lowered its prices to attract new customers.

At a group level, core profit, adjusted for one-off items, fell 11 percent in the quarter to 1.08 billion euros, above the 991 million expected in a Reuters poll of 10 analysts.

(Additional reporting by Victoria Bryan in Frankfurt; Writing by Leila Abboud; Editing by Ben Deighton and David Holmes)

By Robert-Jan Bartunek and Clare Kane


© Reuters 2013
Stocks mentioned in the article
ChangeLast1st jan.
AMÉRICA MÓVIL, S.A.B. DE C.V. 2.01% 16.24 End-of-day quote.12.08%
BANK OF AMERICA CORPORATION 0.41% 41.86 End-of-day quote.38.11%
DEUTSCHE TELEKOM AG 0.55% 17.794 End-of-day quote.18.98%
EMIRATES TELECOMMUNICATIONS GROUP COMPANY PJSC -0.36% 22.04 End-of-day quote.30.41%
HSBC HOLDINGS PLC 0.18% 436.95 End-of-day quote.15.34%
LIBERTY GLOBAL PLC -0.75% 27.83 End-of-day quote.14.91%
MORGAN STANLEY 0.40% 92.05 End-of-day quote.34.32%
ROYAL KPN N.V. -0.71% 2.667 End-of-day quote.7.24%
SOFTBANK CORP. -0.04% 1408.5 End-of-day quote.8.93%
SOFTBANK GROUP CORP. -0.27% 8000 End-of-day quote.-0.72%
TELEFÓNICA DEUTSCHLAND HOLDING AG 0.09% 2.274 End-of-day quote.0.84%
TELEFÓNICA, S.A. -0.46% 4.0795 End-of-day quote.25.72%
THE GOLDMAN SACHS GROUP, INC. 1.10% 378.05 End-of-day quote.43.36%
VIVENDI SE 0.45% 29.06 End-of-day quote.10.16%
All news about AMÉRICA MÓVIL, S.A.B. DE C.V.
06/01IQSTEL SET TO LAUNCH VISA MONEY ONE : Iqst)
AQ
05/18iQSTEL Revenues Surge 182% In Q1; Crushes Estimates on Way To $60.5 million 2..
AQ
05/12AMERICA MÓVIL B DE C  : “América Móvil informs to the market” (Form ..
PU
05/12Acquisitions, Strong Balance Sheet And Record Revenues Position IQSTEL, Inc. ..
AQ
05/07AMERICA MÓVIL B DE C  : América Móvil informs to the market
PU
05/03EQT holds out hope for KPN after rejection, sources say, but shares slide
RE
05/03EQT holds out hope for KPN after rejection, sources say, but shares slide
RE
05/03PRESS RELEASE : cyan AG and Claro Chile sign contract for cyber security solutio..
DJ
04/30AMERICA MÓVIL B DE C  : América Móvil's first quarter of 2021 financial and oper..
PU
04/29iQSTEL, Inc. Is Setting Revenue Records; Video Explains Why This Internationa..
AQ
More news
Financials
Sales 2021 972 B 48 914 M 48 914 M
Net income 2021 84 189 M 4 237 M 4 237 M
Net Debt 2021 562 B 28 262 M 28 262 M
P/E ratio 2021 13,6x
Yield 2021 2,67%
Capitalization 1 075 B 53 965 M 54 090 M
EV / Sales 2021 1,68x
EV / Sales 2022 1,61x
Nbr of Employees 184 100
Free-Float 48,0%
Chart AMÉRICA MÓVIL, S.A.B. DE C.V.
Duration : Period :
América Móvil, S.A.B. de C.V. Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends AMÉRICA MÓVIL, S.A.B. DE C.V.
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 13
Average target price 17,88 MXN
Last Close Price 16,24 MXN
Spread / Highest target 35,5%
Spread / Average Target 10,1%
Spread / Lowest Target -3,33%
EPS Revisions
Managers and Directors
NameTitle
Daniel Hajj Aboumrad Chief Executive Officer & Director
Carlos José García Moreno Elizondo Chief Financial Officer
Carlos Slim Domit Chairman
David Antonio Ibarra Muñoz Independent Director
Pablo Roberto González Guajardo Independent Director
Sector and Competitors
1st jan.Capitalization (M$)
AMÉRICA MÓVIL, S.A.B. DE C.V.12.08%53 970
AT&T INC.1.95%209 345
T-MOBILE US7.79%181 231
SOFTBANK GROUP CORP.-0.72%124 813
KDDI CORPORATION18.07%74 431
VODAFONE GROUP PLC7.36%51 117