America Movil has secured a larger stake in KPN, in the teeth of the Dutch telco’s opposition, and looks set to make further acquisitions to build a Vodafone-style global empire.
The Latin American giant gained a 27.7% holding in KPN and pledged to be a long term strategic partner. It also vowed to keep its stake at the current level, even though it was offered almost 40% of KPN by angry shareholders when its offer closed last week.
America Movil, which has also secured a stake in Telekom Austria, is taking advantage of low values and distressed stocks in the eurozone to expand its footprint and secure strategic alliances. Although Latin America has greater growth potential than Europe, the Mexico-based firm has huge market share and limited room for manoeuvre against key rival Telefonica, as well as regulatory pressures. It also aims to tap into the experience and contacts of partners in more advanced markets in terms of mobile services and revenues.
KPN had held out for a higher price for the stake, even though its predator had been steadily accumulating holdings on the open market. But shareholders apparently regarded the offer as the best option, even though America Movil is keen for the Dutch company to hold onto its Belgian and German units (Base and E-Plus). KPN has recently talked about offloading these in order to reduce debt and streamline its operations but has met with no success.
Jos Versteeg, analyst at Dutch bank Theodoor Gilissen, told Reuters he believes America Movil’s owner Carlos Slim wanted to build a big European network. “They’ve bought a stake in Telekom Austria and they want to expand it gradually,” he said. “They want to do what Vodafone is doing, getting a global network.”