TV Azteca to combine and spin off mobile assets

MEXICO CITY (Reuters) - TV Azteca, Mexico's No. 2 broadcaster, said on Thursday that it was merging its Iusacell and Unefon cell phone assets and spin off the combined company, valued at about $1.3 billion.

Merging Iusacell and Unefon will create a cell phone company with about 3.4 million subscribers and a 7 percent market share.

TV Azteca, controlled by billionaire Ricardo Salinas, said Unefon would become part of Iusacell (CEL.MX), forming a company with sales of 11 billion pesos ($1 billion) a year.

TV Azteca shareholders will receive one share of Iusacell for every 97 TV Azteca CPO shares (TVAZTCACPO.MX), the equivalent of 1.86 pesos for each TV Azteca share or 20 percent of Wednesday's closing price, the broadcaster said.

The shares will probably be handed out in the second quarter, TV Azteca said.

TV Azteca stock soared 8.3 percent to 10.30 pesos following the announcement.

Shares of Iusacell, a small percentage of which were already traded on Mexico's stock exchange, added 1.9 percent to 183.50 pesos.

TV Azteca said Iusacell was worth about $1 billion before the merger, and Unefon's value was $333 million.

The merger puts Iusacell in third place in Mexico in terms of subscriber numbers, behind market leader America Movil (AMXL.MX) (AMX.N) with more than 40 million.

Telefonica Moviles (TEF.MC) is in second place with more than 7 million subscribers.

At least 23 percent of Iusacell shares will float on Mexico's stock market, with the rest owned by Salinas's holding company.

TV Azteca announced plans to merge the two cell phone companies last September.

($1 = 11.06 pesos)