America Movil cancelled an agreement to acquire 99.3 per cent of Telefonica units in El Salvador, blaming the collapse on regulatory demands.
In a statement, America Movil said the decision was mutually agreed with Telefonica: “after careful consideration by both parties of the conditions to obtaining regulatory approval established by the Superintendencia de Competencia in their recent ruling on the proposed transaction”.
Last month the anti-competition regulator greenlit the deal on the condition America Movil, owned by Mexican billionaire Carlos Slim, would adhere to regulatory rules set by the regulator to safeguard competition in the country.
A key condition set was America Movil’s local unit Claro, must refrain from using spectrum currently in use by Telefonica’s Movistar units until it receives certification to do so. Additionally, Claro will have to continue current and future Movistar marketing campaigns for the next seven years, but tariffs could be updated.
Telefonica’s Movistar unit operates Moviles El Salvador and Telefonica Multiservicios in the country, America Movil reportedly proposed a $315 million bid for them.
America Movil first registered interest back in January 2019, which was knocked back by the regulator, due to Claro not providing sufficient information to predict the deal’s effect on competition.
A completed deal would have continued Telefonica's sweeping plans to divest the majority of its Latin American businesses, to focus on four core markets: the UK, Spain, Germany and Brazil. Telefonica CEO Jose Maria Alvarez-Pallete, bullishly said plan would add €2 billion a year to group revenues.