Carlos Slim, the richest man in the world, has made a bid through his company, America Movil SAB, to purchase the rest of Royal KPN NV for €7.2 billion ($9.6 billion).
Many see this as a move to block Telefonica S.A. from buying KPN’s German business.
Spain’s Telefonica and Mexico’s America Movil control approximately 60% of Latin America’s mobile business.
Dutch carrier, KPN owns Germany’s E-Plus. Telefonica had offered €8.1 billion ($11 billion) to buy E-Plus from KPN last month. KPN’s Board had agreed to the sale which would create Germany’s largest wireless carrier (customer numbers).
Telefonica already owns Telefonica Deutschland Holding AG, operating under the O2 brand. If it acquires E-Plus, the two businesses combined would be greater than Vodafone Group Plc and Deutsche Telekom AG by customer counts.
America Movil announced today that it has not yet made a decision on whether it will support Telefonica’s bid.
Both company’s, Telefonica and America Movil are competing fiercely to make headway into the European mobile phone market.
For Carlos Slim, Telefonica’s bid for E-Plus became a serious obstacle in his European plans. Experts see his current bid to buy the remaining 70% of KPN as a move to block Telefonica.
Experts believe Slim’s and Telefonica’s expensive European market rivalry will carry on for the next few months.
America Movil, which owns 30% of KPN, has offered €2.40 per share for the other 70%.
In a press release today, America Movil wrote:
“The Intended Offer price of EUR 2.40 per share implies a premium of approximately 35.4% over the average closing price of KPN’s ordinary shares on Euronext Amsterdam for the last 30 trading days.”
While KPN’s share value rose 17% today in Amsterdam, America Movil dropped 7.2% in Mexico City.
The offer will be made official in September, and is subject to Carlos Slim gaining a stake of over 50% in KPN.
Some experts believe that Carlos Slim’s recent maneuvers are an attempt at getting Telefonica to make a higher bid.
Carlos Slim aiming for a bigger role in Europe
Carlos Slim has spent billions over the last year as he tries to gain a larger foothold in the European wireless carrier market. In 2012, America Movil increased its stake in KPN with an investment of $4 billion, paying €8 per share.
According to Reuters today, “European telecoms firms are mostly struggling with saturated markets, recession-hit consumers, tough regulation and expensive network upgrades, leading some to look at consolidation.”
Carlos Slim, the richest man in the world
Forbes List places Carlos Slim Helu, aged 73, as the richest man in the world for the fourth year in a row, with a net worth of $73 billion (March 2013).
In March 2013, Slim’s net worth increased by $4 billion compared to March 2012, mainly due to rises in the stock prices at his industrial/retail giant Grupo Carso, and his financial arm, Grupo Financiero Inbursa.
America Movil is his largest asset, worth $36.3 billion. Over the last year, the company has invested heavily in Europe.
According to Forbes, “Early 2013 saw a surge in Slim’s philanthropic activity. The Carlos Slim Foundation pledged to translate into Spanish 1,000 videos from the Khan Academy education nonprofit website.
Slim also hosted Bill Gates in late February; the two men announced they are funding research to improve farmers’ yields and reduce hunger.”