MEXICO CITY - Billionaire Carlos Slim's America Movil launched a $21 billion offer on Wednesday for Mexican telephone company Telmex and Telmex Internacional to give a boost to his telecom empire.
Slim, who controls all three companies, wants to integrate them to create a provider with fixed-line telephone, mobile and Internet services across Latin America to better compete against growing rivals.
America Movil is Latin America's top mobile phone provider and plans to buy the two companies through their holding company Carso Global Telecom.
With this consolidation, the company will offer integrated communication services in the region, America Movil said in a statement.
America Movil said that if it was successful in its offer it would acquire indirectly 59.4 percent of Telmex's shares in circulation and 60.7 percent of those of Telmex Internacional.
America Movil is offering 2.0474 of its shares for every share of Carso Global Telecom, a slight premium over Wednesday's close.
America Movil shares closed at 31.79 pesos per share in Mexico City on Wednesday and at that price, Carso shareholders would receive 65.09 pesos for every share. Carso Global Telecom's shares closed at 62.73 pesos a share on Wednesday.
Carso Global Telecom had 3.5 million shares in the third quarter of 2009, valuing that part of the deal at $18 billion. Slim controls the majority of those shares.
America Movil also offered 0.373 of its shares for every share of Telmex Internacional outside of Carso Global Telecom or 11.66 pesos per share in cash. America Movil said 39.3 percent of Telmex Internacional's shares were not in the hands of Carso Global Telecom.
That section of the deal is worth about $3.4 billion, according to Reuters data.
Following the acquisitions, Slim plans to delist Carso Global Telecom and Telmex Internacional, America Movil said.
The acquisitions have yet to be approved by authorities.
Technology, regulation and growing competitors are chipping away at Telmex, the cornerstone of Slim's telecommunications holdings. Once-frantic sales growth at America Movil is tapering off as the company fights for customers with Spain's Telefonica.
Slim -- who acquired creaking telephone monopoly Telmex from the government in 1990, shook it up and expanded it across Latin America -- is increasingly challenged by media giant Televisa and smaller cable television operators.
They offer clients packages of television, Internet and telephone services.
Televisa and cable operators have said they may bid for mobile frequencies in an upcoming auction in Mexico and launch their own mobile telephone operators to compete against America Movil.
(Reporting by Adriana Barrera and Armando Tovar in Mexico City and Robin Emmott in Monterrey; Editing by Gary Hill)