Slim raises stake in Telekom Austria

Latin American operator group America Movil has increased its stake in European operator group Telekom Austria.

The LatAm group, controlled by billionaire Carlos Slim, has agreed to acquire 13.9 million shares in Telekom Austria, through Carso Telecom, a holding company owned by America Movil. The shares equate to a 3.14 per cent stake in the European group.

Before this agreement, America Movil already directly held 7.94 million shares in Telekom Austria, which gave it 1.79 per cent of the voting rights in the group. Indirectly, through Carso Telecom, it held a further 96.96 million shares, equating to a 21.9 per cent stake in the firm.

With this latest share purchase, Carso Telecom will hold a 25.02 per cent of voting rights in Telekom Austria, with America Movil indirectly holding 26.81 per cent of those rights.

America Movil has long been trying to increase its presence in Europe. The group abandoned its attempt to acquire Dutch operator KPN in October last year, after a blocking move made by the KPN Foundation had left it unable to “fulfil its aim” with the deal. It took its stake in KPN to 29.8 per cent in February 2013.

According to Steven Hartley, practice leader of Ovum’s Industry, Communications & Broadband Practice, it is clear that America Movil is still interested in growing its presence in Europe, as it has not relinquished any shares in European telcos.

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“On the one hand, you might look at the recent performance and economic situation in European markets and think who would want that? But at the same time, there is logic in the move in so much as growth in Latin America is not going to be infinite so America Movil is looking to increase its footprint to boost revenue. There might be lower margins in Europe, but expanding its footprint does make sense.

Furthermore the Mexican government is currently trying to restructure its telecoms market, and America Movil could well come under huge pressure at home. “I can see the logic of gaining close operational experience in Western Europe as America Movil looks to bring in converged services in its home markets.”

With a 26.81 per cent holding  in Telekom Austria, America Movil has passed the 25 per cent threshold that enablesit to block attempted moves made by other shareholders. Hartley believes America Movil may eventually attempt a full takeover of the group, but will act cautiously, given its previous experience with KPN.

“I think it will come to that point but Telekom Austria is a former incumbent and with KPN, the government got involved in that deal, and the Austrian government will likely get involved in any similar deal as well. Some of the subsidiaries in the Balkan region are former government owned incumbents as well, so this is more emotive than merely an M&A deal.”

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