AT&T to buy Nextel Mexico for US$1.9bn

US operator AT&T has struck a deal with NII Holdings to acquire its Nextel Mexico wireless business for US$1.88bn.

Telecom heavyweight AT&T will obtain Nextel assets including spectrum licenses, network properties, retail stores and around 3mn subscribers.

"We believe that the sale of Nextel Mexico represents an opportunity to reduce our operational risk, deliver value to our stakeholders and provide the liquidity that will position us to emerge from Chapter 11 reorganization with a healthy balance sheet and fund our business plan in Brazil," NII Holdings CEO Steve Shindler said in a release.

The acquisition is pending regulatory approval in Mexico and by the US Bankruptcy Court.

NII Holdings filed for Chapter 11 bankruptcy proceedings in late 2014, after posting a net loss of US$629mn for the second quarter of that year.

The company went on to sell Nextel Chile to a consortium of Argentine, UK and US investors for US$250mn. Rumors of the company selling its other Latin American units, including Nextel Mexico, began circulating last year.

Nextel Brazil is NII Holding's LatAm heavy hitter, with 1.7mn customers as of 2014.

AT&T entered the Mexican telecom market in November, when it announced its intention to acquire struggling Iusacell for US$2.5bn. The transaction was finalized this month.

AT&T had made known its interest in Nextel in November, and predicted it would dominate Mexico's telecom market within the next decade.

The operator said in a press release that "based on its recent positive experience with Mexico's focused regulatory review and approval process" it expected to close the Nextel deal around the middle of the year.

AT&T is the first foreign operator to join Mexico's telecom market, following the regulatory reform of 2013. Should the merger with Nextel Mexico move forward, AT&T will add 2.8% of the market to the 8.4% it absorbed from Iusacell.