Verizon sells off Latin American holdings
Verizon Communications announced it will sell off its holdings in Puerto Rico, the Dominican Republic, and Venezuela. The buyers are two companies, América Móvil and Teléfonos de México SA, both mostly owned by Mexican billionaire Carlos Slim. The deal is reported to be for $3.7 billion.
América Móvil is the largest cell phone provider in Latin America, and the #4 telecommunications company in the world. It has been snapping up Latin American assets of North American and European companies. It is now, along with Spain's Telefónica SA, the big player in that market.
. Verizon currently has full ownership of Verizon Domenicana, a majority share in Telecomunicaciones de Puerto Rico, and about a 25% share of Cia. Anonima Nacional Telefonos de Venezuela. After the sale, Verizon's only non-US holding will be its 23% share in Vodafone's Italian operations.
According to a Wall Street Journal article ("Verizon Pulls Out of Latin America", 4/4/06), Verizon is keen on consolidating is US position to compete with newly expanded AT&T. The article notes:
Analysts speculated some of the proceeds of the sale -- as well as a recent plan to shed the company's telephone-directories business -- could help Verizon finance any buyout of Vodafone PLC's 45% stake in Verizon Wireless, a deal that could be valued at roughly $40 billion.
This is no sign of weakness in Verizon. It's simply regrouping its assets to form a more coherent and (presumably) more profitable company.
