AT&T Inc, the second biggest mobile phone carrier in the U.S. has agreed to acquire Grupo Iusacell SA owned by Ricardo Salinas a billionaire for just over $2.5 billion to expand into Latin America even further.
AT&T will add 8.5 million subscribers with this acquisition of the closely held carrier, which is the third biggest wireless carrier in Mexico. However, it has struggled in competing against America Movil SAB owns by Carlos Slim.
The acquisition price includes debt of $800 million and will close after Salinas is able to close a deal to purchase the 50% of the company that Grupo Televisa SAB owns, said AT&T in a prepared statement on Friday.
Earlier in the year, Enrique Pena Nieto the President of Mexico signed legislation that overhauled the telecommunications in the country. The new measure promotes competition and reinforces oversight of the industry as a whole.
AT&T, based in Dallas, has been looking for deals across Mexico and Latin America. In September, John Stankey, the Chief Strategy Officer said Mexico was ready to be invested in and that he saw a number of options both short and long term across Latin America.
While this transaction must be reviewed by the telecom regulator in Mexico, AT&T said it believes the deal will be completed during the first quarter of 2015.
The agreement in May to purchase DirecTV, a deal still awaiting the approval of regulators, marked the first push by AT&T outside the U.S. in over a decade as it attempts to counter a slowdown in growth in the U.S.
AT&T was amongst the companies that were contacted by America Movil about acquiring $17.5 billion of the landline and wireless businesses in Mexico.
American Movil said the buyer needed to be new in the Mexico telecommunications market in order to create more competition.
