Televisa’s AT&T Mexico deal boosts its challenge to America Movil

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MEXICO CITY, Oct 14 : Shares in Televisa rose on Wednesday after the Mexican broadcaster said it would buy AT&T's Mexican unit, in a move welcomed by investors that will set up a showdown with telecoms giant America Movil.

The acquisition, if completed, would significantly expand Televisa’s telecom footprint, with Scotiabank analysts estimating its share of Mexico’s fixed and wireless subscribers would more than double to 19 per cent from 8 per cent.

The increase in scale would strengthen Televisa’s position in a market dominated by America Movil, controlled by the family of Mexican billionaire Carlos Slim. However, analysts cautioned that integrating the new business and competing in Mexico’s costly, fiercely contested telecom sector could limit the benefits of the deal.

The deal, worth $2 billion in cash and done in tandem with privately held Fintech Holdings, pushed shares up around 5 per cent at 1555 GMT.

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The transaction is expected to close in the first quarter of 2027. Investors aren't likely to expect major gains until the combined company delivers on expected results.

The valuation represents a significant discount to comparable telecom companies in Latin America, but the acquisition carries some execution risks, Santander analysts wrote in a note.

"Value will be created through turning around AT&T Mexico’s operations which have historically struggled (low margins) and eventually build out a convergent fixed-mobile offering ... which could also prove challenging," the note said.

Santander analysts expected little immediate effect on America Movil, citing its scale and dominant market position. Scotiabank, however, said the deal could intensify competitive pressure because the relatively low purchase price could allow Televisa and Fintech to devote more capital to network investment.

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