AT&T Inc., the second-largest U.S. wireless carrier, agreed to acquire Grupo Iusacell SA from billionaire Ricardo Salinas for $2.5 billion to expand further into Latin America.
AT&T is gaining 8.6 million subscribers with the purchase of closely held Iusacell, the third-largest mobile-phone operator in Mexico that has struggled to compete. The purchase price includes Iusacell’s debt, and the acquisition will take place after Salinas closes a deal to buy the 50 percent of Iusacell owned by Grupo Televisa SAB, AT&T said today in a statement.
AT&T is expanding into Mexico after agreeing earlier this year to pay $48.5 billion for DirecTV, which provides satellite- TV service in Latin America. The deal also comes months after President Enrique Pena Nieto signed a telecommunications overhaul into law that promotes competition and reinforces oversight of the telecommunications industry.
“Our acquisition of Iusacell is a direct result of the reforms put in place by President Pena Nieto to encourage more competition and more investment in Mexico,” AT&T Chief Executive Officer Randall Stephenson said in the statement. “Those reforms together with the country’s strong economic outlook, growing population and growing middle class make Mexico an attractive place to invest.”
AT&T said it plans to expand Iusacell’s wireless network beyond the 70 percent of Mexico’s population that it currently reaches.
Televisa had just agreed to sell its stake to Salinas in September for $717 million, taking a loss on its investment.