America Movil to Buy CIE Unit - Analyst Blog
January 22 2013 - 1:42PM
Zacks
AmericaMovil (AMX) is all set
to takeover the media-and-advertising unit of Mexican
live-entertainment company Corporacion Interamericana de
Entretenimiento SAB (CIE) for 1.67 billion pesos ($131 million).
The acquisition is expected to be completed by the second half of
2013, subject to pending approvals.
CIE Entretenimiento, a part of CIE contributes 20% to CIE’s
earnings. It mainly focuses on sponsorship of concerts and live
performances, venue management, ticketing, souvenirs sales and
artist management and representation. So, the fund to be
accumulated through the sale of its CIE Entretenimiento unit will
allow the company to reduce some debt apart from bolstering its
working capital.
America Movil dominates nearly 70% of the Mexican market. At
present, the company is specializing more on acquisition
strategies. In order to gain more opportunities in wireless
services and pay-TV business, the company bought Pay-TV firm Net
Servicos, the largest multi-service cable company in Latin
America.
In January 2012, the company collaborated with Claxson
Interactive Group to acquire DLA Inc., which adds video-on-demand
service on cable-TV channels in Latin America. Moreover, the
company also entered into a partnership with AT&T
Inc. (T) last year to provide Internet services
worldwide.
Higher usage of smartphones and tablets is exerting huge
pressure on the network. So, to counter such problems, America
Movil launched fourth-generation (4G) mobile services in 9 cities
in Mexico in November, last year and plans to add 26 more cities
under LTE coverage by April 2013.
Despite the Mexican wireless market becoming more challenging,
the company seems to be well ahead of other leading operators like
Telefonica (TEF) and Grupo
Televisa (TV), on the basis of its service quality and
network strength.
Currently, America Movil carries a Zacks Rank #2 (Buy).
AMER MOVIL-ADR (AMX): Free Stock Analysis Report
AT&T INC (T): Free Stock Analysis Report
TELEFONICA S.A. (TEF): Free Stock Analysis Report
GRUPO TELEVISA (TV): Free Stock Analysis Report
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