Archive for April 4th, 2006

Telmex agrees to buy Verizon’s stake in CANTV

April 4, 2006

In a long-rumoured deal, Mexican Telecom company Telmex reached a deal to purchase Verizon’s stake in Venezuela’s telecom company CANTV,as well as that company’s operations in Domnican Republic and Puerto Rico. If the Venezuelan regulators approve it, Telmex will have to make a tender offer for all of the shares of CANTV according to Venezuelan capital markets law. The total price of the transaction would be US$ 2.3 billion.

CANTV was privatized in 1991, when its controlling stake was sold to GTE for an equivalent of US$ 4.2 billion, GTE was later acquired by Verizon. At the time fixed line telephony was the big business at CANTV. CANTV”s cellular unit has over 5 million cellphones today. The price is low but, the Chavez premium is high.