Televisa Takes 30% Stake in Nextel Mexico
Published on: 15th Feb 2010
Note -- this news article is more than a year old.
NII Holdings has confirmed that, as anticipated, it is to sell a stake in its Mexican network to local media giant, Grupo Televisa. Under the agreement, Televisa will invest US $1.44 billion in cash for an initial 30% equity stake in Nextel Mexico, which reflects an implied pre investment value of Nextel Mexico of $4.3 billion. Televisa will also be granted an option to acquire an additional 7.5% equity interest in Nextel Mexico that will be exercisable on either the 3rd or 4th anniversary of the completion of the initial investment.
The initial investment is of $1.14 billion with the remaining investment made in three equal annual installments.
NII Holdings will continue to hold the remaining equity interests in Nextel Mexico and Nextel Mexico's management team led by Peter Foyo will continue to manage the wireless operation.
"With this partnership, we are accessing a platform with an experienced management team and a solid track record in the Mexican telecommunications industry," said Emilio Azcarraga Jean, Chairman and Chief Executive Officer of Grupo Televisa. "There are significant synergies between Nextel Mexico's wireless offerings and our extensive base of pay TV subscribers. With this venture we will be able to offer to our customer base the first quadruple play in Mexico, which paves the way for a successful integrated media and telecom strategy. In addition, with the various Televisa properties, Nextel Mexico will have access to an unparalleled media and marketing platform."
Televisa is granted the right to appoint 2 of 6 Nextel Mexico board members as well as special approval rights for specified significant decisions, transactions and corporate events. NII Holdings retains 70% of the equity in Nextel Mexico and will appoint the remaining four Nextel Mexico board members.
Televisa's investment and the other transactions contemplated by the investment agreement are conditioned upon the Nextel/Televisa consortium being awarded licenses to use specified amounts of spectrum in the upcoming spectrum auctions in Mexico and other customary closing conditions.