Grupo Televisa S.A. (TV), the largest broadcast TV operator in Mexico, recently sold its stake in Iusacell to Grupo Salinas for $717 million. In Jun 2012, the company had acquired a 50% stake in the small-sized wireless operator Grupo Iusacell for a consideration of $1.7 billion.
In Sep 2014, Televisa had decided to sell its stake after Iusacell went bankrupt. Notably, Iusacell is the third largest Mexican wireless operator after America Movil SAB de CV (AMX) and Telefonica S.A. (TEF).
Meanwhile, in Dec 2014, Grupo Salinas entered into a definitive agreement with U.S. telecom behemoth AT&T Inc. (T) to sell 100% of Iusacell for a total consideration of $2.5 billion (including cash and debt components).
Televisa is likely to utilize the proceeds from the sale to finance its recent acquisition of cable TV operator, Cablevision Red. Televisa paid approximately $204 million in cash and acquired another $490 million of debt and other liabilities of Cablevision Red, which has about 650,000 revenue-generating units.
Televisa expects this takeover to generate around $136 million of revenues and $68 million of EBITDA (earnings before interest, tax, depreciation and amortization) in 2015.
In Aug 2014, Televisa solidified its position in the Mexican pay-TV market by acquiring a 100% stake in rival pay-TV operator Grupo Cable TV, popularly known as Cablecom S.A. The Cablecom acquisition added 1.2 million customers (video, data or voice) to Televisa’s kitty with at least 840,000 TV (video) subscribers.
The combined entity comprising Televisa, Cablecom and Cablevision Red will render economies of scale fit enough to compete with America Movil SAB which presently serves 22 million high-speed Internet and telephony customers.
Additionally, Televisa continues to benefit significantly from its ownership stake in the U.S. broadcaster Univision Communications Inc. Privately held Univision is the largest Spanish-language broadcaster in the U.S.
Currently, Televisa effectively holds a 38% (after converting debt into equity) stake in Univison. This leaves scope for another 2% stake buy over the next three years. Over the first three quarters of 2014, Televisa received a record-high $236.2 million in royalty from Univision.
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