Mexico’s anti-monopoly regulator Federal Competition Commission (Cofeco) has approved Televisa’s plan to acquire half of mobile phone operator Grupo Iusacell. The approval came after the government agency rejected the plan earlier this year.
Since that rejection, the players were given time to address concerns, though earlier this month Mexico’s antitrust commission voted on an appeal of its decision earlier this year to reject the proposed deal.
The acquisition plan, which was announced in April 2011, calls for Televisa, the country’s largest television company, to pay $1.6 billion for half of Iusacell, which controls less than 5% of Mexico’s mobile phone market.
Cofeco has subjected the approval to the acceptance of certain conditions, including the conversion by Televisa of the debentures issued by GSF Telecom Holdings – the controlling company of Grupo Iusacell – into common stock of GSF.
The conditions include:
a) Corporate governance: GSF’s board of directors and corporate governance will implement certain governance standards of publicly listed companies, which include independent board members, controls on related party transactions, the creation of an audit committee, fiduciary duties of board members and corporate officers; also, there will be controls in place to avoid any information sharing of the shareholders’ television business.
b) Programming: Televisa will offer to all cable and DTH platforms in Mexico a new pay programming package that will only include Televisa’s four over-the-air channels. This offering will complement the current pay programming package of 14 over-the-air and pay-TV channels launched in 2007.
c) Advertising: Televisa will offer the sale of advertising time to participants in the Mexican telecommunications industry.
d) Total Play: Within a period not to exceed one calendar year, GSF will divest all of its equity interest in Total Play to GSF´s current controlling shareholder or a subsidiary under its control.
e) Rules of conduct: Televisa will have to follow certain rules of conduct regarding a potential public bid of spectrum designated for a new entrant related to the broadcast of free television signals with national coverage (also known as the “third network”).
In a statement Televisa said it will analyze the terms and conditions contained in the resolution. Televisa highlighted Iusacell’s progress in the past 12 months on taking important steps towards expanding its network, increasing its subscriber base and improving the quality and availability of mobile service offerings in the market.
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