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MEXICO CITY, Nov. 23 (Reuters) – Mexican company America Movil (AMXL.MX) has completed the sale of its TracFone wireless unit to Verizon Communications Inc (VZ.N), the telecommunications company said on Tuesday, as part of a deal worth over $ 6 billion. in cash and Verizon shares.
America Movil, controlled by the family of Mexican billionaire Carlos Slim, has received more than $ 3.6 billion in cash from the sale of prepaid mobile provider TracFone and nearly 57.6 million shares of Verizon, reported the company in a statement filed with Mexican action. to exchange.
Verizon must pay an additional amount of up to $ 650 million in cash within two years, subject to TracFone meeting certain operational goals, America Movil said.
America Movil shares rose 1.9% on Tuesday afternoon.
Company officials told an investor day in October that after a number of deals, including the sale of TracFone, the company would reduce its net debt to EBITDA ratio and be able to increase distributions. to shareholders in the years to come.
Share buybacks in 2021 alone would be higher than in the past five years combined, officials said.
The United States Federal Communications Commission on Monday approved Verizon’s acquisition of TracFone with terms designed to protect low-income consumers.
The FCC said the conditions required would protect low-income consumers from price increases and require the company to continue participating in a low-income telecommunications subsidy program called Lifeline.
The agency will need an internal, independent compliance officer “authorized to proactively monitor conditions, ensure low-income consumers are not harmed and facilitate consumer complaints about potential violations.”
Verizon is the largest US wireless operator in terms of subscribers. TracFone serves over 20 million customers.
So far this year, America Movil has spent more than 31.4 billion pesos ($ 1.48 billion) on repurchases, according to exchange documents.
On Monday, it announced a 26 billion pesos ($ 1.22 billion) increase in its buyout fund balance for the period April 2021 to April 2022.
($ 1 = 21.2260 Mexican pesos)
Reporting by Cassandra Garrison; additional reporting by David Shephardson Editing by Sonya Hepinstall
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