Telefonica snaps up BellSouth assets to become top dog in Latin America
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MADRID (AFP) - Spanish telecommunications operator Telefonica said it had agreed to buy the mobile telephone operations in Latin America owned by the US company BellSouth to become the leading player in the region.

Telefonica mentioned 5.8 billion dollars (4.68 billion euros) as "the price the group would pay assuming it also bought the minority stakes (in the companies acquired) that are not in BellSouth's hands," a spokesman for Telefonica Moviles, the subsidiary that is to carry out the transaction, told AFP.


He did not reveal the total cost of the transaction specifically with regard to BellSouth's stakes.


A spokesman for Telefonica had earlier said the 5.8 billion dollars price tag corresponded to the value of BellSouth mobile telephony shares in Latin America.


Telefonica said the acquisition would bring it 10.5 million new customers, thereby strengthening its position as the Latin American market leader for mobile telephone services.


Telefonica Moviles will take control of all holdings owned by BellSouth in operators in Argentina, Chile, Peru, Venezuela, Colombia, Equador, Uruguay, Guatemala, Nicaragua and Panama, the company said.


Following the deal Telefonica Moviles will have 62.5 million customers, 41 million of them in Latin America from 30.5 million previously.


"The deal will make us one of the four main mobile telephony operators in the world," a Telefonica statement read.


Telefonica was already the main fixed line services provider to Latin America. Company chairman Cesar Alierta said the mobile phone acquisition would bring to an end its growth in Latin America via acquisitions.


In a statement, Telefonica Moviles quoted its chairman, Antonio Viana-Baptista, as saying the purchase would boost customers and shareholders alike.


"Aside from reinforcing our position in key markets, this operation will bring about cost synergies to the tune of some one billion dollars, which will translate into benefits for our customers and shareholders," Viana-Baptista said.


Telefonica Moviles, the most dynamic of Telefonica's subsidiaries, will finance the deal via a mix of cash-flow and debt although it and its Telefonica parent will not in the process exceed "solid debt ratios," his statement added.


Companies owned by BellSouth which will now come under Telefonica Moviles' umbrella managed 2003 total sales of 2.5 billion dollars and cumulated core earnings (EBITDA) of 867 million dollars.


Had they belonged to Telefonica Moviles in fiscal 2003 the Spanish firm's sales would have hit 5.40 billion dollars in Latin America alone, the company said, adding that the deal would now go forward for approval by the regulatory authorities of the countries where the new acquisitions are based.


In 2002, Telefonica Moviles turned in a net loss of 3.92 billion euros (4.85 billion dollars at current rates) owing to the restructuring and froze third generation mobile programmes in Austria, Germany, Italy and Switzerland.


But last year a 76 percent fourth quarter annualised jump in earnings turned that into a 1.6 billion euro profit.


Across 2003 as a whole, sales were up 11.1 percent to 10.07 billion euros.

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