DALLAS (dpa-AFX) - AT&T Inc (T) Friday agreed to buy Mexican wireless company Iusacell from Grupo Salinas for $2.5 billion, including debt, as part of efforts to grow in the Latin American nation, where regulatory reforms, an improving economy and a growing population make the deal attractive.
AT&T expects the deal to close in the first quarter of 2015, subject to review by the Mexican telecom regulator and its National Foreign Investments Commission.
The deal will occur after Grupo Salinas, currently owning 50 percent of Iusacell, closes its purchase of the remaining stake of the company.
'Our acquisition of Iusacell is a direct result of the reforms put in place by President Peña Nieto...Those reforms together with the country's strong economic outlook, growing population and growing middle class make Mexico an attractive place to invest,' said Randall Stephenson, AT&T CEO.
'Iusacell gives us a unique opportunity to create the first-ever North American Mobile Service area covering over 400 million consumers and businesses in Mexico and the U.S.'
Under the deal, AT&T will buy all of Iusacell's wireless properties, including licenses, network assets, retail stores and about 8.6 million subscribers.
Iusacell operates a 3G wireless network based on the global GSM/UMTS technology that AT&T uses in the U.S. The company offers wireless service under its eponymous and Unefón brand names with a network that covers about 70 percent of Mexico's about 120 million people. AT&T plans to expand Iusacell's network to cover millions of additional consumers and businesses in Mexico.
The deal provides AT&T with the assets necessary to create a first-ever North American Mobile Service area catering to both r U.S. and Mexican customers calling or visiting each other's countries.
Mexico is still in the early stages of mobile Internet capabilities and adoption, but customer demand for it is growing rapidly, AT&T CEO Stephenson said, adding that Iusacell is a good long-term growth opportunity, with manageable near-term cash flow and capital expenditure requirements.
Iusacell will continue to be based in Mexico City following the completion of the deal.
Also, AT&T said its Project VIP network investment plan is ahead of schedule. The company has almost completed the expansion of its 4G LTE network, which now covers more than 300 million people in the U.S.
AT&T also expects its 2015 capital expenditure budget for its existing businesses to be in the $18 billion range.
AT&T stock closed Friday at $34.91, up $0.19 or 0.55%, on a volume of about 18 million shares on the NYSE. In after hours, the stock gained $0.24 or 0.69%,
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