Verizon on Monday said it would buy pre-paid mobile phone provider Tracfone, a unit of Mexican telecom giant US Movil, for $ 6.25 billion (about Rs 45,932 crore) in cash and stock deals.
Tracfone, Which serves approximately 21 million customers through more than 90,000 retail locations across the United States, said more than 13 million of its customers rely on Verizon’s network under the existing agreement. Verizon Is the largest US wireless carrier by subscriber.
The US wireless industry is concentrated in the hands of three mobile carriers due to several merger deals in recent years: T Mobile, Which completed its $ 23 billion (about Rs 1,69,032 crore) in April Merger Together Sprint To consolidate its positions in the United States, AT&T, and Verizon.
America Movil, Which was created by a state monopoly, is Mexico’s largest telecom operator ever and controlled by the family of Mexican billionaire Carlos Slim, the richest man in the Latin American nation.
Tracfone had become popular with the lower end of ultra-competitive US Telecom The consumer market and Verizon now plan to provide new products for that segment following this “strategic acquisition”, said Hans Westburg, Verizon’s president and chief executive.
“This transaction firmly establishes Verizon through the Tracfone brands as the provider of choice in the value segment, complementing our clear leadership in the premium segment,” said Ronen Dunne, Executive Vice President and Group CEO, Verizon said.
Verizon shares rose more than 1 percent in morning trading. American Movil shares jumped more than 3.5 percent at the opening of the Mexican market.
The deal will include $ 3.125 billion (approximately Rs 22,972 crore) in cash and $ 3.125 billion (approximately Rs 22,972 crore) in Verizon stock.
credit Suisse Verizon is acting as financial advisor on the deal, which is expected to close in the second half of 2021.
© Thomson Reuters 2020
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