America Movil and Chile’s ENA bid jointly for Telefonica Chile

Mexico’s America Movil SAB de CV and Chile’s Empresa Nacional de Telecomunicaciones SA are working on a joint bid for Telefonica’s Chile unit, according to people familiar with the matter.

America Movil, which already operates in the country through ClaroVTR, would be interested in the mobile phone business of Telefonica Chile, while Entel would take the fixed-line segment, according to the people, who asked not to be named because the talks are private.

The deal would represent a consolidation of Chile’s fiercely competitive telecom market. Telefonica is among the four companies that are currently battling it out for dominance, most of them at a loss. One rival, WOM, recently came back from bankruptcy, while ClaroVTR got a fresh injection of cash from one of its owners. WOM may also bid for parts of Telefonica Chile, another person said.

Entel’s shares leaped 8.6% to 3,690 pesos on Thursday, their biggest advance since October 2022, while America Movil’s stock rose 2.2%. Telefonica Chile bonds maturing in 2031 extended gains on the news, rising 6.6 cents on the dollar to 58.9 cents, according to Trace data.

The joint bid comes amid speculation some offers would be blocked by the regulator due to antitrust concerns. Movistar, as Telefonica’s mobile phone service is known, had 23.2% of the market as of June, according to the latest data collected by the regulator. Meanwhile, Entel had 33.2% and Claro had 20.9%.

The talks over the sale are ongoing and the approach could change as the process continues.

Entel said it is “always looking closely at all the alternatives that add value” to the company, but didn’t confirm the news. ClaroVTR didn’t immediately respond to a request for comment, while Spain’s Telefonica and America Movil declined to comment.

The sale is part of Telefonica Chairman Marc Murtra’s plan to divest non-core markets as part of a sweeping review put in place after he joined the company in January. Since July of last year, they have announced the sale of subsidiaries in Peru, Colombia and Argentina. Murtra has said consolidation across European markets is a main pillar of his vision that will be presented on Nov. 4, with Germany, UK, Spain and Brazil as the four core markets. Bloomberg