Telefónica Outbids CANTV For Colombia Telecom

Spain’s Telefónica has beaten off rival bidder CANTV of Venezuela to win control of Colombia Telecom for $369 million. Telefónica outbid its Venezuelan rival by $17 million to buy 50% plus one share of Colombia’s largest state-owned telephone company, exceeding government expectations of a $350 million sale price. The government is holding on to almost half the company to ensure the privatization does not lead to the creation of a private quasi monopoly as it did in many Latin American countries, most notably Mexico. The sale has thwarted attempts by Mexican entrepreneur Carlos Slim to gain a foothold in Colombia’s telecoms market. Last year a bid by his Telmex of $350 million was rejected by the government as too low. Two weeks ago he bought 29% of CANTV in what was seen as a move to secure control of the Colombian provider. Citicorp advised the government on the privatization.