The agreement between Televisa and AT&T Mexico strengthens its challenge against America Movil.

Reuters Mexico City, October 14 - On Wednesday, Televisa (TLEVISACPO.MX) shares rose after the Mexican broadcaster announced it would acquire AT&T's Mexican subsidiary (link), a move welcomed by investors and set to trigger a direct confrontation with telecom giant America Movil (AMXB.MX).

If completed, the acquisition would significantly expand Televisa's business footprint in the telecom sector. Scotiabank analysts estimate its market share among fixed-line and wireless users in Mexico would double from 8% to 19%.

The increased scale would solidify Televisa's position in a market dominated by America Movil, controlled by Mexican billionaire Carlos Slim's family. However, analysts warn that integrating the new business and competing in Mexico's highly competitive, high-cost telecom industry may limit the benefits of the deal.

The deal is valued at $2 billion in cash and is being completed together with private firm Fintech Holdings, prompting shares to rise about 5% at 15:55 GMT.

The transaction is expected to close in the first quarter of 2027. Investors are unlikely to see significant gains before the merged company achieves its expected performance.

Santander Bank analysts wrote in a report that the valuation shows a significant discount compared to Latin American peer telecom companies, but the acquisition carries a degree of execution risk.

"Value creation will come from turning around AT&T's Mexico operations—which have historically struggled due to (low profit margins)—and ultimately building an integrated fixed and mobile network service... but this could also be highly challenging," the report said.

Santander Bank analysts believe that, given America Movil's size and market dominance, the short-term impact of the acquisition on America Movil is limited. However, Scotiabank said the deal could intensify competitive pressure, since the relatively low acquisition price may allow Televisa and Fintech to invest more in network development.

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