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America Movil Agrees to Buy Verizon Assets in Latin America

April 04, 2006|From Bloomberg News

Carlos Slim's America Movil, the largest wireless phone carrier in Latin America, agreed to buy assets from Verizon Communications Inc. for $3.7 billion to build its operations in three countries.

America Movil will purchase a unit in the Dominican Republic and a controlling stake in Puerto Rico Telephone, Verizon said Monday. A company owned by America Movil and Telefonos de Mexico will buy Verizon's indirect stake in Caracas, Venezuela-based CANTV.

The purchase will expand Slim's lead over Telefonica of Spain in a battle for dominance of Latin American phone markets, adding 15 million customers in three countries. New York-based Verizon, the No. 2 U.S. carrier, is selling operations to concentrate on its home territory, where it lags behind AT&T Inc. Verizon will use the sale's proceeds to repurchase stock and cut debt.

Shares of Verizon rose 36 cents to $34.42.

Slim's business stretches across the hemisphere, in industries including construction, banking and telecommunications. His estimated $30-billion fortune places him third on the Forbes list of billionaires.

The acquisition is his second deal involving Verizon in the last year. Slim agreed to sell his 13% stake in MCI Inc. to Verizon in April 2005 for $1.3 billion. Verizon used the shares to help win a bidding war for MCI.

The latest Verizon deal boosts the number of countries where America Movil operates to 17 from 14. Slim last year spent about $1 billion to buy wireless carriers in Chile, Peru and Paraguay, part of an effort to expand his businesses in the Americas.

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