In the news today is America Movil's move down in Mexico to break itself up. Carlos Slim's flagship is planning to sell off 'certain assets' to take its marketshare in Mexico below 50%.
As a response to moves by Mexican regulators to increase competition, it is both an expected and surprising move -- expected because it's an obvious solution to the situation, but surprising in that it actually might happen. I've taken the renewed Mexican regulatory effort with a grain of salt, figuring whatever they came up with would leave room for Slim and AMX twist their way out.
Until we see how they actually do it, they still might. But regardless it could be a really big deal for Mexico, and the repercussions will be felt for a long time. The government there is hoping to attract further investment in media and telecom, and it looks like they might get it. But now I'm thinking about the other side of the coin. With America Movil ready to sell off assets, I'm wondering what they might do with the cash.
Further diversifying the company beyond Mexico is the obvious response, meaning their appetite for assets elsewhere in the world will surely increase. The company has already been active in European consolidation, taking a big swing at KPN and apparently connecting over at Telekom Austria. But if you thought we were seeing more than enough of Carlos Slim already in the M&A arena, that may just have been the warm-ups.
Perhaps Slim's capitulation is less about giving up and more about opportunities elsewhere.
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