América Móvil topped the ranking of the largest mergers and acquisitions of trans-Latin companies 2019-2020, reported the Economic Commission for Latin America and the Caribbean (Cepal).
Among the purchasing companies, the following stood out: América Móvil, Empresas CMPC, LATAM Airlines Group, BICECORP, NCB Financial Group, Arauco, Enel Américas, Mineros, Credicorp, Hochschild Mining, Despegar and Marfrig Global Foods.
In 2019, América Móvil, FEMSA, Grupo Bimbo and Alsea, among others, were responsible for the most important mergers and acquisitions in Mexico, either due to their size or due to their strategic importance.
While some Mexican companies bought abroad in order to diversify, many others decided to sell assets to strengthen their financial situation. Among those that made sales are CEMEX, Elementia and Banco Azteca.
In this context, the share of income from abroad in total net sales of the largest Mexican companies fell from 42% to 38.7% from 2017 to 2019.
América Movil
The announcement by the Spanish transnational company Telefónica that it would focus on its most profitable markets has opened the possibility of significantly reducing its presence in Latin America, giving the possibility of its eternal rival, América Móvil, to improve its participation in the main markets of the region.
At the beginning of 2019, the Mexican company bought the operations in Guatemala and El Salvador from Telefónica for 648 million dollars.
The agreement included the transfer of 100% of the assets of Telefónica Guatemala and 99.3% of the assets of Telefónica El Salvador.
Indicators of América Móvil
With this operation, the Mexican company was going to overcome the barrier of 280 million users in the 21 countries in which it operated and was going to achieve a participation of 47% and 38% in the markets of Guatemala and El Salvador, respectively. However, at the beginning of September 2020 América Móvil and Telefónica terminated the contract for the purchase of the operations in El Salvador.
South America
In Brazil, América Móvil acquired the Nextel Telecomunicações operations for 905 million dollars, thereby increasing its market share to almost 26%, 6 points below Telefónica.
With this acquisition, the Mexican company strengthened its presence in the postpaid market in large Brazilian cities (São Paulo and Rio de Janeiro) and became the largest mobile operator in Latin America (Expansión, 2020b).
However, these movements and economic uncertainty are putting pressure on América Móvil’s investment capacity in the upcoming spectrum auctions for the application of 5G technologies.
In El Salvador, on the other hand, América Móvil withdrew from acquiring Telefónica’s operations and, in Costa Rica, after the failure of the agreement with Millicom International Cellular, Telefónica announced a sale agreement with Liberty Global for 425 million dollars.
