NEW YORK-Telefonos de Mexico S.A. de C.V. and SBC Communications Inc. announced May 3 they would jointly purchase Cellular Communications of Puerto Rico Inc. for $814 million from CoreComm Inc., New York.
Under terms of the transaction SBC and Telmex will acquire CCPR through a joint venture for about $464 million in cash and will assume $350 million in long-term debt, SBC said. The acquisition will be accounted for as a purchase and is expected to close by late fall, providing regulators and shareholders approve it.
SBC, headquartered in San Antonio, owns 10 percent of Telmex, and Telmex in turn will own about 25 percent of CCPR.
SBC will operate Cellular Communications of Puerto Rico, which has 330,000 wireless telephony customers. In terms of subscribers, it is the largest carrier serving the commonwealth and the U.S. Virgin Islands, with a combined population is about 4 million. CCPR sells its services under the Cellular One brand, which will remain in place after the acquisition.
CCPR also offers paging and long-distance wireline telecommunications in Puerto Rico. It is seeking regulatory approvals to provide local wireline service to business customers in San Juan, the capital of Puerto Rico.
“With this agreement, we are adding an outstanding provider to SBC’s wireless network,” said Edward E. Whitacre Jr., chairman and chief executive officer of SBC.
“The transaction also positions us with a skilled management team to enter the San Juan market as a competitive local exchange carrier for landline customers.”
In a related development, Telmex announced May 4 it would buy out Sprint Corp.’s stake in Telmex-Sprint Communications L.L.C. The 50-50 joint venture markets international long-distance wireline services to Hispanics living in the United States. Telmex did not disclose the purchase price for this buyout.
