Telefónica has reached a binding agreement for the sale of all of its capital in its Mexican subsidiary to the Melisa Acquisition consortium, made up of the technology company Oxio and the investment fund Newfoundland Capital Management. The operation, valued at 450 million dollars (approximately 390 million euros), marks the definitive exit of the Spanish operator from the Mexican market and consolidates its divestment strategy in Latin America. Although the operator has not detailed the financial details of the operation, the sale will record strong capital losses on the balance sheet as has already happened in the exit of the rest of the Latin American subsidiaries, which caused a net loss of 4,318 million euros, the second largest in its history.
According to the relevant fact sent to the National Securities Market Commission (CNMV) in the early hours of this Wednesday, the transaction is executed through Telefónica Hispanoamérica, a unit that brings together the group’s assets in the region. The agreement contemplates the transfer of 100% of the shares of the companies Pegaso PCS and Celular de Telefonía, the legal entities that operate under the company’s trademark in Mexican territory.
The sale price agreed under the concept of firm value is subject to customary net debt and working capital adjustments at closing. The completion of the transfer is subject to the approval of the Mexican regulatory authorities, mainly the Federal Telecommunications Institute (IFT), as well as compliance with the standard contractual conditions in this type of corporate transactions.
With this move, the multinational chaired by Marc Murtra reduces its presence on the American continent to just two markets: Brazil, considered a strategic and cash-generating pillar for the group, and Venezuela, where it maintains operations under a differentiated management model. This divestment in Mexico marks the most significant step to date in management’s plan to simplify the balance sheet and focus capital resources on Spain, Germany, the United Kingdom and Brazil.
The sale to Melisa Acquisition represents the entry of a new player with a financial and technological profile in the mobile telecommunications sector in Mexico. The consortium is led by Oxio, a technology platform specialized in network virtualization and connectivity solutions, together with Newfoundland Capital Management, an asset management firm with experience in infrastructure and emerging markets.
Sources close to the operation indicated that Melisa Acquisition’s interest lies in Telefónica’s current customer base in Mexico and in the subsidiary’s operating model. Telefónica México had already transformed its business structure in recent years through a strategic agreement with AT&T for the use of its last-mile network infrastructure, which allowed the Spanish firm to reduce its operating and spectrum maintenance costs, essentially operating as a large-scale virtual mobile operator.
The $450 million valuation reflects this asset-light structure (asset-light). According to industry analysts, the multiple applied to the transaction is aligned with recent valuations of connectivity services companies that do not have their own physical access network infrastructure, but maintain a relevant market share in the prepaid and postpaid segment.
Strong handicaps
The exit from Mexico is part of the roadmap defined by Telefónica’s board of directors to accelerate the reduction of financial leverage. The company has repeatedly stated that its priority is the allocation of capital in markets that offer regulatory security and the potential for sustained long-term growth. However, the huge investments in the country will represent a strong capital loss in the accounts of the Spanish multinational, as has happened with the sale of the rest of the American subsidiaries (Argentina, Chile, Peru, Colombia, Uruguay and Central America).
Marc Murtra’s management has intensified the asset rotation process that began with the creation of Telefónica Hispanoamérica as an independent unit. The original objective of this division was to seek alliances, mergers or outright sales to limit the group’s exposure to currency volatility and macroeconomic risks in the region. After previous operations in Central America and the partial sale of fiber assets in Chile and Colombia, the divestment in Mexico is the milestone that almost completes the regional withdrawal.
Telefónica has stressed in its statement that this decision will allow the company to strengthen its business structure in Europe. The Spanish market continues to be the main generator of Ebitda for the group, while the operations in Germany and the United Kingdom (through the joint venture VMO2) are key to the deployment of 5G and fiber optic networks.
Stay in Venezuela
The decision to maintain only operations in Brazil and Venezuela responds to opposite dynamics. In Brazil, Telefónica (under the Vivo brand), considered the strategic market along with Spain, the United Kingdom and Germany. As for Venezuela, the operator maintains a dominant position in the local market. Although the financial contribution to the consolidated group is limited, with strong net losses, due to exchange restrictions and the country’s economic situation, the operation generates operating cash flows that are reinvested in the local network itself. In addition, the group has links with the country’s political regime, which has forced it to invest $500 million in the extension of the 5G network without a guarantee of return, and when the regime of Nicolás Maduro, now imprisoned in the United States, was still in force.
Victoria the Slim
The telecommunications market in Mexico now faces a new configuration after the departure of a historical competitor. Telefónica entered Mexico in 2000 after acquiring several local operators, including Pegaso. For more than two decades, the company competed to be the main alternative to Telcel (América Móvil). owned by billionaire Carlos Slim who consolidated his fortune in the privatization of the Mexican telephone monopoly Telmex more than three decades ago and has dominated the market since.
However, the high costs of radio spectrum in Mexico and the strong concentration of the market made it difficult to make capital-intensive investments profitable. This situation led the company to return the spectrum it owned and migrate its traffic to the AT&T network in 2019, a move that anticipated the sale reported today.
For users in Mexico, it is expected that the change in ownership will not result in an immediate interruption of services. Melisa Acquisition has indicated that it intends to take advantage of Oxio’s technological capabilities to modernize the commercial offer and deepen the integration of digital services, maintaining existing wholesale agreements to guarantee national coverage.
From an accounting point of view, the €389 million transaction will contribute to the net reduction of Telefónica’s debt, which has been a priority for credit rating agencies. Although the figure is lower compared to other infrastructure operations (such as the sale of Telxius towers), the real value for Telefónica lies in the elimination of operational liabilities and the simplification of its corporate organization chart.
The market has reacted stably to the announcement. Analysts agree that the operation is consistent with the “active portfolio management” discourse that the company has maintained in its latest earnings presentations. The exit from a low-margin and high regulatory complexity market such as the Mexican one is seen as a necessary measure to improve the group’s free cash flow profile.
The operation will be subject to review by the CNMV and the competent bodies in Mexico during the coming months. If the expected deadlines are met, Telefónica expects to definitively close the transfer of shares before the end of the third quarter of 2026. With this closure, Telefónica’s global presence map will be reduced to its four core markets and the aforementioned residual or strategic stakes, culminating a structural transformation process that has lasted more than five years.
