UPDATE 3-Mexico's Slim consolidating telecoms in $21 bln move

* Mexican tycoon Slim aims to merge telecom companies

* Deal offers premium for shareholders

* New company would provide phone, mobile and Internet (Recasts; adds quote from Slim’s spokesman, deal background)

MEXICO CITY, Jan 13 (Reuters) - Billionaire Carlos Slim launched a $21 billion plan on Wednesday to consolidate his Latin American telephone companies that made him one of the world’s richest men but that now face increasing competition.

Slim’s America Movil mobile operator launched a share offer for Mexican fixed-line companies Telmex and regional company Telmex Internacional, which he also controls.

As competition in Latin American telecommunications increases, Slim wants to integrate his companies to create a provider with fixed-line telephone, mobile and Internet services across Latin America to better challenge rivals.

America Movil AMXL.MX is Latin America's top mobile phone provider and plans to buy the two companies through their holding company Carso Global Telecom TELECOMA1.MX, creating one large telecom operator with several services.

“This is a company that is going to offer triple- and quadruple-play services in 18 countries,” Slim’s spokesman Arturo Elias Ayub told Reuters, referring to packaged services of Internet, television and fixed- and mobile-telephone.

Consolidating the companies will bring Slim’s telecom empire full circle. Slim acquired Telmex from the government in 1990, shook it up and expanded it across Latin America.

Then in 2001, Slim spun off Telmex’s cellphone arm to create America Movil, which went on to become Latin America’s leading mobile operator and outgrow its parent company.

As regulation stiffened in Mexico in 2008, threatening growth, Slim spun off Telmex’s non-Mexican fixed-line and Internet operations, including operators in Brazil, Chile and Argentina, creating Telmex Internacional.

Now, technology and growing competitors are chipping away at Telmex. Once-frantic sales growth at America Movil is tapering off as the company fights for customers with Spain's Telefonica TEF.MC.


America Movil said that if it was successful in its offer, it would acquire indirectly 59.4 percent of Telmex's TELMEXL.MX shares in circulation and 60.7 percent of those of Telmex Internacional TELINTL.MX.

Telmex, which controls more than 80 percent of Mexico’s fixed-line phone market, would continue to operate and would remain listed on the Mexican stock exchange. Telmex Internacional would become part of America Movil.

America Movil is offering 2.0474 of its shares for every share of Carso Global Telecom, a slight premium over Wednesday’s close.

America Movil shares closed at 31.79 pesos per share in Mexico City on Wednesday and at that price, Carso shareholders would receive 65.09 pesos for every share. Carso Global Telecom’s shares closed at 62.73 pesos a share on Wednesday.

Carso Global Telecom had 3.5 million shares in the third quarter of 2009, valuing that part of the deal at $18 billion. Slim controls the majority of those shares.

America Movil also offered 0.373 of its shares for every share of Telmex Internacional outside of Carso Global Telecom or 11.66 pesos per share in cash. America Movil said 39.3 percent of Telmex Internacional’s shares were not in the hands of Carso Global Telecom.

That section of the deal is worth around $3 billion, according to Reuters data.

Following the acquisitions, Slim plans to delist Carso Global Telecom and Telmex Internacional, America Movil said.

The acquisitions have yet to be approved by authorities, who in the past have tried to increase competition in the country’s telecom industry.


In a sign of tougher times for Slim, Telmex was the only stock in Mexico's IPC benchmark index .MXX to lose ground last year, falling nearly 25 percent as investors bet future profits will shrink.

With more than 80 percent market share, Telmex remains by far Mexico’s largest fixed-line telephone and Internet operator, although revenue is steadily declining as it freezes prices for a 10th straight year to stem customer losses.

Telmex is increasingly challenged by media giant Televisa TLVACPO.MX and smaller cable television operators.

They offer clients packages of television, Internet and telephone services.

Televisa and cable operators have said they may bid for mobile frequencies in an upcoming auction in Mexico and launch their own mobile telephone operators to compete against America Movil.

The share offer underscores that 69-year-old Slim remains a massive force in Latin America, where his holdings also include upscale Mexican retail stores, Inbursa bank GFINBURO.MX and infrastructure developers.

In the United States, he has stakes in Saks Inc SKS.N and The New York Times Co. NYT.N. (Additional reporting by Adriana Barrera and Armando Tovar in Mexico City and Robin Emmott in Monterrey; editing by Carol Bishopric)