América Móvil, Telefónica advance with key acquisitions in Chile and Brazil

América Móvil and Telefónica, the two largest telecom groups in Latin America, made key M&A progress in the Chilean and Brazilian markets.

In Chile, competition authority FNE gave its greenlight for América Móvil to acquire ClaroVTR, the troubled 50-50 JV it created in late 2021 with Liberty Latin America (LLA).

FNE concluded that the transaction would not generate a major negative impact on the competitive landscape, even if it means the exit of VTR from the country’s fixed segment.

Since its creation, ClaroVTR has struggled with investment issues and high leverage on VTR’s side amid fierce competition in the Chilean market.

LLA and América Móvil previously agreed to capitalize and control ClaroVTR in equal parts, but "Chile's telecommunications sector has some structural problems," LLAs CEO Balan Nair told BNamericas in an interview in June.

In December 2023, América Móvil and LLA pledged cash allocations of 972 billion pesos (US$1bn) for the JV’s capital needs. Of the total, América Móvil committed to 720bn pesos through convertible loans, including 289bn pesos for debt refinancing. 

In June, the Mexican group said it intended to take 91% control of ClaroVTR after LLA decided not to refinance the debt it acquired under the December funding deal.

FNE’s assessment began in August with a focus on the impacts on the tower and carrier markets as well as looking into the vertical relationships in the international trunking segment.

As of end-June, Claro was the fourth mobile player with 18.6% of the country’s 26.9 million mobile accesses. 

VTR ranked second in fixed broadband, with 23.3% of 4.63mn connections. In pay-TV, VTR led with 28.8% of the 3mn-subscriber base.

TELEFÓNICA

In Brazil, Telefónica’s subsidiary Vivo said it completed the acquisition of local cloud services provider Ipnet.

Announced in June for 230mn reais (US$41.8mn) and led by Vivo’s Telefonica Cloud Brasil (TCloud), the transaction received clearance from antitrust authority Cade in August.

Ipnet is an expert in cloud computing and is said to be the main integrator of Google cloud services in Brazil. With the deal’s completion, Ipnet will be incorporated into TCloud, including 260 professionals and 140 Google technology developers.

The acquisition is expected to leverage Vivo’s sales and integration of cloud services beyond large corporations, reaching SMEs that have sought to digitalize their operations while also “expanding our portfolio more toward Google rather than just AWS and Microsoft,” Christian Gebara, the telco's CEO, previously said.

Vivo does not rule out additional purchases in the cloud computing field as part of its B2B strategy.