El Salvador again rejects AMX takeover of Telefónica unit

El Salvador’s competition regulator SC has for a second time rejected América Móvil's (AMX) request to acquire a controlling stake in Telefónica’s local operation.

In a statement released Wednesday, the SC said the "resolution of inadmissibility" was agreed on August 26 and relayed to the two parties on 28 August. The reason given was for failing to provide information about the level of market concentration that would result from the transaction.

On September 2, AMX and Telefónica both waived their right to appeal the decision. However, the SC said that does not prevent the Mexican telco from submitting a new application once it has the necessary documentation.

In January, América Móvil announced it had reached an agreement with its Spanish rival to acquire Telefónica's Guatemala and El Salvador assets for US$333mn and US$315mn, respectively.

On April 29, the SC notified América Móvil that its request for approval of the deal was "inadmissible," saying the company had not filed appropriate documentation for analysis.

Telefónica is trying to reduce its debt, particularly after suffering a major hit to its share price in August. This week the company announced it would accelerate the process of monetizing its infrastructure assets, which includes selling off towers, as well streamlining its workforce through a combination of retraining and a voluntary layoff program.

In February the Spanish company also sold its other Central American assets – in Panama, Nicaragua and Costa Rica – to Millicomfor US$1.65bn plus its insurance group Antares. The company also sold 658 towers in Peru for US$80mn and 11 datacenters for 550mn euros (US$609mn).