TEM: 8 of 10 BellSouth acquisitions complete

Spain's Telefónica Móviles (NYSE: TEM) now has control of eight Latin American mobile operators formerly owned by BellSouth (NYSE: BLS), the company said in a statement. TEM agreed in March to buy all 10 of BellSouth's Latin American operations for US$5.850bn and began closing the process mid-October with the transfer of units in Ecuador, Guatemala and Panama, which accounted for US$1.66bn of the operation. The process is now also closed for BellSouth units in Colombia, Nicaragua, Peru, Uruguay and Venezuela for a combined value of US$2.67bn. The Venezuelan and Colombian units are key assets, valued at US$1.2bn and US$1.05bn respectively. The two units have 3.9 million and 2.64 million customers respectively. TEM now has 100% control of all these units except BellSouth Peru, in which it has a 97.43% stake, with the remaining 2.57% still publicly traded. To secure 100%, TEM entered into negotiations with BellSouth Colombia secondary shareholder Valores Bavaria and BellSouth Uruguay secondary shareholder Motorola. BellSouth made its own efforts to secure minority holdings in the Venezuelan unit, mainly from Grupo Cisneros. The Nicaraguan unit was already 100%-owned by BellSouth. The Telefónica group already has important fixed line assets in Peru, Chile and Argentina, and the transfer is taking longer in these last two countries because of investigation by the local anti-monopoly authorities. TEM nevertheless expects full closure before year-end. When TEM agreed to buy all 10 units in March, they represented a total client base of 12.5 million and stood to build TEM's overall Latin American client base to more than 60 million. In Colombia, Telefónica Móviles plans to keep the BellSouth brand until year-end, similar to BellSouth's decision on the Celumóvil brand name when it acquired the operator in 2000. Telefónica Móviles plans to change the brand name to Movistar starting early next year. BellSouth Colombia is Telefónica Group's fourth business unit in Colombia, adding to local divisions of Telefónica Data, Terra Networks and Atento. The operator reported a client base of 2.67 million users at end-September, while rival operator Comcel had 4.74 million subscribers. A third operator, Ola, launched late 2003 and ended the first half with almost 800,000 users.