Grupo Televisa (TV) Acquires Full Control of Cablecom - Analyst Blog

By
A A A

Grupo Televisa, S.A. ( TV ), the undisputed leader in the Mexican pay-TV market, has further solidified its foothold by acquiring a 100% stake in rival pay-TV operator Grupo Cable TV, popularly known as Cablecom S.A.

Last year, Televisa had acquired a 51% stake in Cablecom after convertible debt exchange of a 95% stake in Tenedora Ares SAPI, which originally owned 51% of Cablecom. The deal included an option to acquire the remaining 49%, subject to regulatory approvals.

Recently, Televisa declared its receipt of the required regulatory approval to acquire the remaining 49% stake in Cablecom for a total consideration of 8.55 billion Mexican Pesos (approximately $654 million).


Televisa, which serves 8.9 million customers through its cable or satellite TV services, currently dominates approximately 70% of the Mexican broadcasting and pay-TV market.Acquisition of Cablecom will add another 1.2 million customers (video, data or voice) to its kitty with at least 840,000 TV (video) subscribers.

Televisa currently serves approximately 3 million Internet (data) and telephony (voice) customers. Acquisition of Cablecom will render economies of scale to compete with America Movil SAB ( AMX ) which serves 22 million high-speed Internet and telephony customers.   

Meanwhile, the government of Mexico has decided to reform its telecommunications sector, predominantly the wireline and wireless phone segments and the cable and satellite TV segments.

The telecommunications sector in Mexico is highly monopolistic with merely one or two companies dominating the market. The Mexican government, however, intends to increase competition by encouraging the entry of other operators.

In this regard, regulator Federal Telecommunications Institute, popularly known as IFT, identified broadcasting giant Televisa and telecom behemoth America Movil as the dominant players in their respective markets.

However, there is a provision in the new telecom regulation which enables any company to acquire its competitor so long their combined market share doesn't exceed 20% of the Mexican telecommunications industry. In line with this provision, Televisa has duly acquired full control of Cablecom.

Other Stocks to Consider

Televisa currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the Broadcast TV/Radio industry include Media General Inc. ( MEG ) and Saga Communications Inc. ( SGA ). Both the stocks currently carry a Zacks Rank #2 (Buy).


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

GRUPO TELEVISA (TV): Free Stock Analysis Report

AMER MOVIL-ADR (AMX): Free Stock Analysis Report

SAGA COMMS-CL A (SGA): Free Stock Analysis Report

MEDIA GENL A (MEG): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: TV , AMX , SGA , MEG

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Stocks

Referenced

0%
100%
100%
75%

Most Active by Volume

82,452,921
  • $118.90 ▲ 3.11%
74,613,603
  • $15.43 ▲ 1.51%
66,005,481
  • $89.81 ▼ 8.78%
59,428,062
  • $42.01 ▲ 1.99%
59,197,226
  • $43.73 ▼ 5.88%
58,342,763
  • $78 ▲ 2.31%
54,852,145
  • $2.99 ▼ 6.56%
50,300,046
  • $35.10 ▼ 0.11%
As of 1/29/2015, 04:15 PM


Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com