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Latin America remains a priority for investors interested in its large population and growth potential. America Movil, the Latin American carrier belonging to the Carlos Slim empire, today announced the acquisition of Nextel in Brazil, owned by NII (formerly Nextel International), for an amount of 905 millions of dollars. NII in turn said that once the agreement reached, he received the authorization to "dissolve and liquidate NII".
This initiative aims to strengthen an existing operator in competition with major players such as Telefonica (co-owner of Vivo with Portugal Telecom), Telecom Italia and Oi (owned by Telemar). America Movil is already present in the country, Claro, which it plans to merge with Nextel to "consolidate its position as one of the leading providers of telecommunication services in Brazil, by strengthening the capacity of its mobile network, spectrum portfolio, subscriber base, coverage and quality. especially in the cities of São Paulo and Rio de Janeiro, Brazil's main markets. "
America Movil – based in Mexico – is consolidating, engulfing other smaller badets in various markets in the region. In January, it acquired Telefonica's badets in Guatemala and El Salvador for $ 333 million and $ 315 million, respectively.
The Nextel Brazil agreement will include the purchase of a 70% stake in the carrier to NII, as well as a remaining 30% to AI Brazil Holdings BV, announced today NII. AI Brazil Holdings is controlled by Access Industries of Len Blavatnik, the company that owns Warner Music, Deezer and a number of other badets and investments. He was also interested in increasing his share in the carrier before agreeing to sell his interest.
The acquisition marks the last chapter of the troubled business, which was originally the international division of Nextel, but had been split as a separate company before Sprint's acquisition of Nextel in the United States in 2005. NII focused on the mobile carrier operations markets, but it had difficulties and had been subject to multiple bankruptcy processes.
"The announcement of this transaction marks the culmination of a long multi-year process to define a strategy for Nextel Brazil and offers us the best opportunity to monetize our remaining operating badets in light of the competitive landscape of Brazil and the long-term need to raise significant capital to finance business operations, debt servicing and the capital expenditures needed to remain competitive in the future, "he said. Dan Freiman, The chief financial officer of NII, in a statement. "Management and our board of directors believe that the transaction is in the best interest of NII shareholders."
This agreement represents a final chapter for the brand Nextel, which had been a pioneer in the mobile market thanks to its push-to-talk mobile radio service. This was a pioneer in the biggest wave of messaging services competing with basic SMS operators, and some came to think that it was the first mobile social network. However, over time, the iDEN digital network that offered the service has become obsolete and most operators offering iDEN-based services (including Nextel) have dropped out of business to focus on 3G and the following mobile technologies.
More generally, the acquisition highlights how a number of investors willing to cope with the waves of economic and political ups and downs in Latin America continue to see growth opportunities in the region.
NII – based in Reston, Va. – traded on the Nasdaq and had a market capitalization of only $ 322 million at the last close of the markets. The company currently has 3.3 million subscribers. But while he was apparently looking for a buyer of the Brazilian business, his latest badet, for nearly three times his market capitalization, is a testament to how some might see the frozen value of Nextel Brazil. it exceeded all that.
Last week, Paypal and Dragoneer collectively pledged $ 850 million for MercadoLibre, a marketplace in Argentina. The previous week, SoftBank announced the creation of a new $ 2 billion fund to invest in high-tech companies in the region and help existing portfolio companies grow. (Coincidentally, the SoftBank company will be headed by Marcelo Claure, executive chairman of Sprint, who engulfed the American part of Nextel a few years ago and was eventually bought out by SoftBank.)
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