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América Móvil adn Entel Make Joint Offer for Telefónica Chile
Overview
In late September 2023,américa Móvil (Claro) and Entel jointly submitted an offer to acquire Telefónica Chile,according to Bloomberg.This move follows earlier reports in August 2023 that several companies were considering bids for the Chilean subsidiary of the Spanish telecommunications giant, Telefónica. The potential sale is driven by Telefónica’s ongoing efforts to streamline its operations and potentially exit the Chilean market.
Background: Telefónica’s Strategic Shift
Telefónica has been actively reassessing its international holdings, seeking to reduce debt and focus on more profitable markets. Diario Financiero reported in August 2023 that the company was exploring options for its operations in Latin America, including a potential sale of Telefónica Chile. This strategic review is fueled by a desire to strengthen its financial position and invest in growth areas.
The company’s consideration of a sale comes amidst a broader trend of consolidation within the Latin American telecommunications sector. Competition is fierce, and companies are seeking to achieve economies of scale through mergers and acquisitions.
The bidders: América Móvil and Entel
América Móvil (Claro), controlled by Carlos Slim, is the largest mobile network operator in Latin America. Acquiring Telefónica Chile would substantially expand its market share in Chile, strengthening its position against competitors. As of September 30, 2023, América Móvil had approximately 288.8 million subscribers across its Latin American operations, according to América Móvil’s Investor Relations page.
Entel is a Chilean telecommunications company with a strong presence in both mobile and fixed-line services. The acquisition of Telefónica Chile would allow Entel to become a dominant player in the Chilean market, potentially challenging América Móvil’s leadership. Entel is partially owned by the Chilean state.
Potential Implications
The acquisition of Telefónica chile by América Móvil and Entel could have several significant implications for the Chilean telecommunications market:
- Reduced Competition: A combined entity could lead to less competition, potentially resulting in higher prices for consumers.
- Increased Market Share: América Móvil and Entel would significantly increase their market share, potentially dominating the Chilean market.
- Investment in Infrastructure: The acquiring companies may invest in upgrading and expanding Telefónica Chile’s infrastructure, improving service quality and coverage.
- Regulatory Scrutiny: The acquisition is likely to face scrutiny from Chilean regulators to ensure it does not violate antitrust laws.
Timeline of Events
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