Televisa, Nextel Mexico in Deal

Mexican media giant Grupo Televisa has acquired a 30% stake in Nextel Mexico for $1.44 billion, a move that allows Televisa to partner with a wireless carrier to bid for new wireless spectrum up for auction later this year.

Under terms of the all-cash deal, which has been discussed in the Mexican media for weeks, Televisa will be granted an option to acquire another 7.5% of Nextel Mexico in the third or fourth year after this deal closes. Televisa is the largest media company in the Spanish-speaking world. It is dominant in Mexico in areas such as cable, satellite and television, but has little to no wireless-phone presence. Nextel Mexico is a subsidiary of NII Holdings, the international arm spun out from Nextel before its Sprint merger. NII is based in Virginia and has wireless operations in Mexico, Brazil, Argentina and Peru. Competition in Mexico's telecom industry, dominated by tycoon Carlos Slim's America Movil, is heating up as the government auctions wireless spectrum after years of delays. Movil controls about 70% of the country's wireless market.