Saturday, November 15, 2014
AT&T Plans to Reach Into the Pockets of the World’s Second-Richest Man
Between former Microsoft CEO Bill Gates and current Berkshire Hathaway CEO Warren Buffett lies the world's second-richest man: American Movil's (NYSE: AMX ) Carlos Slim. With a business background instilled by his father, a prominent businessmen in his own right, Carlos Slim started his empire with successful investments in construction, mining, retail, food, and tobacco.
These early investments put Slim in an opportune place during Mexico's 1982 economic crisis. In a classic "buy when there's blood in the streets" move, the magnate bought major Mexican businesses Reynolds Aluminio and General Tire, and acquired large stakes in the Mexican arm of British American Tobacco and The Hershey Company in the aftermath. Those businesses gave Slim the capital and reputation to buy government-owned landline company Telmex from the Mexican government in the early '90s.
Eventually, Slim would found American Movil, the company that would propel him to the top of the billionaire's list. But now AT&T (NYSE: T ) appears to want to take on Slim in his home country. By paying $2.5 billion to acquire Mexican wireless provider Iusacell, the company plans to mount the most serious challenge to Slim's empire yet
That said, AT&T is excited for the opportunity. It appears AT&T will use its United States network to pull in Mexican subscribers. CEO Randall Stephenson commented [emphasis added]:
Our acquisition of Iusacell is a direct result of the reforms put in place by President Pena Nieto to encourage more competition and more investment in Mexico ... Iusacell gives us a unique opportunity to create the first-ever North American Mobile Service area covering over 400 million consumers and businesses in Mexico and the United States. It won't matter which country you're in or which country you're calling -- it will all be one network, one customer experience.