July 26, 2013 / 3:30 PM / in 4 years

America Movil still considering KPN's Telefonica deal

MEXICO CITY (Reuters) - Mexico’s America Movil (AMXL.MX) is still deciding whether to back KPN’s (KPN.AS) proposed sale of its German unit to Spain’s Telefonica (TEF.MC), America Movil Chief Executive Daniel Hajj said on Friday.

KPN, a Dutch telecoms operator, is 30 percent-owned by America Movil.

The Mexican company, controlled by billionaire Carlos Slim, has lost about 2 billion euros on paper from its KPN investment since last year and the proposed deal would cut its exposure to Germany, Europe’s biggest mobile market.

“We will evaluate the terms and the conditions of the transaction ... when those are presented to KPN shareholders; we’ll make a determination at that point of time,” Hajj, Slim’s son-in-law, told analysts on the company’s second-quarter call on Friday.

One analyst asked America Movil whether its strategy in Europe would change, were the deal to sell KPN’s E-Plus unit to proceed.

“That’s exactly - it’s what we’re evaluating, we’re evaluating the terms and conditions,” said Hajj, adding, “I think it’s difficult to answer other questions at this moment.”

America Movil has not given many details about its plans in Europe.

The company has only said it views its stake in KPN and its 24 percent holding in Telekom Austria (TELA.VI) as long-term investments and it is not concerned by the share-price losses.


KPN said earlier this week its management and supervisory boards voted in favor of the deal, but the company would not say how America Movil’s representatives, Chief Financial Officer Carlos Garcia Moreno and Chief Operating Officer Oscar Von Hauske, voted.

    Although America Movil holds only a minority stake in KPN, it has a de facto controlling interest because of low turnouts at the Dutch company’s board meetings.

    The proposed E-Plus sale would void a clause in KPN’s agreement with America Movil that prevents the Mexican company from launching an offer for KPN.

    But analysts have said they believe America Movil would be unlikely to exercise that option given its debt level and its own aggressive share buyback program.

    Shares of America Movil (AMXL.MX) have fallen nearly 9 percent this year, on concerns about a Mexican telecoms reform that seeks to lessen the company’s local market share.

    Shares of the company were up 3.94 percent at 13.73 pesos at midday, after the company late on Thursday reported bigger-than-expected second-quarter revenue and core profit.

    Reporting by Elinor Comlay, additional reporting by Gabriel Stargardter and Tomas Sarmiento

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