America Movil's shareholders Inmobiliaria Carso and Control Empresarial de Capitales are going to purchase AT&T's (NYSE: T) 8.27 percent stake in the company for $5.57 billion.
According to a company filing, AT&T will receive $4.57 billion at the close of the sale and another $1 billion within 60 days after the closing.
AT&T said that it would sever its investment in America Movil as one of the regulatory conditions for its proposed acquisition of DirecTV. DirecTV competes with America Movil for pay-TV customers across Latin America.
After it clears necessary regulatory approvals, AT&T will also gain a 41 percent stake in Sky Mexico, Mexico's largest satellite TV provider. Grupo Televisa SAB, America Movil's largest competitor, owns the remaining 59 percent part of Sky Mexico. DirecTV and America Movil also compete in other Latin America markets including Brazil and Colombia.
One of the benefits of the America Movil sale is that it will give it more cash as it completes its $48.5 billion acquisition of DirecTV, the largest U.S.-based satellite provider. In addition, AT&T expects to raise $2 billion from the sale of its Connecticut assets to Frontier.
Earlier, AT&T had divested 250 million shares of its stake in America Movil for $282 million.
Although AT&T may be selling its stake in America Movil, the Mexican conglomerate is one of AT&T's key off-net international partners. Through an agreement in established in 2013 to use the Mexican telco's local network connections, the telco will be able to connect to 15 countries, including Argentina, Chile and Colombia.
- Bloomberg has this article
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