Mexico City-based America Movil, also known as AMX, is owned by billionaire Carlos Slim. AT&T remains the company’s biggest shareholder outside the Slim family. The $564 million in shares sold represent about 7 percent of AT&T’s stake in the company. The move comes amid AMX’s move to increase share repurchases, which have reduced the company’s outstanding shares by 3.7 percent this year.
AT&T sold its shares on the Mexican market between May 7 and June 4. The company has recently been looking to sell some of its non-core assets like wireless towers. It’s rumored that the company is trying to raise cash to make a joint bid with investment and media company Chernin Group for Hulu that could top $1 billion. The popular internet video provider is currently owned by News Corp. (NASDAQ:NWSA), Walt Disney Co. (NYSE:DIS), and Comcast Corp. (NASDAQ:CMCSA).
The two companies have had a long relationship. Back in 1990, AT&T’s predecessor Southwestern Bell Corp. helped the Slim family privatize Mexico’s state-owned phone company. Now America Movil owns 70 percent of Mexico’s mobile phone lines, and 80 percent of the country’s landlines. AT&T’s current Chief Executive Officer Randall Stephenson spent the early years of his career with the company working with the Slim family to help A&T oversee its Mexican investment.
AT&T commented on the sale in an emailed statement, saying, “From time to time we rebalance our asset levels and raise cash for general corporate purposes. We’ve historically owned about 9 percent of AMX. As a result of AMX’s recent share repurchases and our sales, we will again hold an approximate 9 percent interest in AMX.”
Analysts don’t believe AT&T will sell any more of its stake in America Movil, keeping its shares at around 9 percent. The companies still have a good relationship and AT&T will keep its two seats on America Movil’s board, analysts said.
Shares in the Mexican company have dropped 16 percent this year as Mexican lawmakers created a new regulator with stricter rules to help challenge the company’s dominance.