Telecom Argentina, Cablevision agree to merge amid telecoms reform
17:57 BST, 2 July 2017 | UPDATED: 17:57 BST, 2 July 2017
The merger, announced in a statement over the weekend, needs to be approved by regulators and shareholders. It would enable the combined company to offer fixed line and cell services as well as pay television and broadband internet access.
Telecom Argentina will issue 1.184 billion shares, leaving Cablevision shareholders with 55 percent of the combined company, the statement said.
Shortly after taking office, Macri signed a decree to allow phone companies to offer pay television services, an area that had long been dominated by Cablevisión, an internet, cable TV and data transmission company that was previously part of Grupo Clarin.
Grupo Clarin, Argentina's largest media conglomerate, said last August it was spinning off Cablevision.
Even though the reforms will not be fully implemented until 2018, the government said in September it expected $20 billion in investments over four years due to a more competitive market.
Without a cable partner, telephone companies would need to improve their network cables in order to deliver television. They would also have to compete with satellite distributor DirecTV, Supercanal and some 1,000 small cable channels.
Local media and analysts had therefore long speculated that once the spin-off of Cablevision from Clarin was complete, it could merge with Telecom, which was acquired in March of last year by investment group Fintech. Fintech is also a minority shareholder in Cablevision.
More mergers and acquisitions could follow.
Spain's Telefonica SA, which owns Telefonica Argentina, has expressed interest in buying pay TV assets in Latin America, sources have told Reuters. (Reporting by Eliana Raszewski; Writing by Caroline Stauffer; Editing by Mary Milliken)