Vodafone to Buy 35% of Mexico's Iusacell for $973 Mln (Update1)
By Eduardo Garcia
Mexico City, Jan. 6 (Bloomberg) -- Vodafone Group Plc plans to acquire 35 percent of Grupo Iusacell SA, Mexico's No. 2 wireless telephone company, for $973 million, the latest step by the largest mobile phone company to expand worldwide.
Vodafone is buying the stake from the Peralta family and other investors, according to a statement from Iusacell distributed through the electronic bulletin board of the Mexican Stock Exchange.
The transaction is part of Vodafone's plan to increase business in new markets. The U.K. company agreed last month to spend $6.3 billion on acquisitions in Ireland and Japan.
Vodafone's entry into Mexico highlights the growing interest in the country's $12 billion telecommunications market. AT&T Corp. and WorldCom Inc. already have operations in Mexico. Spain's Telefonica bought the Latin American wireless phone business of Motorola Inc. for $2.6 billion in October, gaining at least 1.4 million Mexican customers.
The sale to Vodafone, based in Newbury, England, will end the Peralta's family involvement with Iusacell, which began more than 10 years ago. The Peralta family relinquished management control of the company in February 1997 to Bell Atlantic Corp., which later became Verizon, after sagging sales and concern about growing competition disappointed investors.
Today, Mexico's wireless telephone market is increasing. Wireless users doubled last year and are now close to 11 million. Wireless companies estimate they will add about 24 million more users over the next five years.
Iusacell has wireless licenses in five of Mexico's nine regions, covering Mexico City, which has about 18 million people, and Guadalajara, the country's No. 2 city.
Vodafone needs approval from its shareholders and also those of Verizon before it can buy the stake in Iusacell. Mexican regulators also must review the transaction. |
