A1 Telekom Austria remains under Mexican control

The Mexican group América Móvil (AMX) has been in charge of A1 Telekom Austria (TA) since 2014. The group is dominated by the richest Mexican, Carlos Slim Helús, and some family members. The Republic of Austria continues to hold a blocking minority in TA, but has concluded a syndicate agreement with AMX for A1 Telekom Austria. That contract is now being extended by ten years, giving AMX more leverage.

In addition, the two shareholders have decided to spin off the passive parts of TA’s mobile radio transmitter systems into a separate company. The ownership structure of the new company will correspond to that of A1 for the time being: AMX holds 51 percent, the Republic Holding ÖBAG 28.42 percent, the rest is in free float. The existing TA shareholders will then hold two shares, namely TA and the still unnamed radio tower company.

From now on, this will collect rent from the TA for the use of the radio masts, but should also attract other network operators as customers, insofar as this is not already the case through legally prescribed joint use of the site. TA operates mobile and landline companies in Austria, Belarus, Bulgaria, Croatia, North Macedonia, Serbia and Slovenia. A1 Telekom Austria has withdrawn from Liechtenstein in 2020.

More influence for AMX

With the new syndicate agreement, AMX and ÖBAG have agreed that the TA company headquarters will remain in Austria and that the free float of around 20.5 percent will remain listed on the Vienna Stock Exchange. In return, ÖBAG will have to give up the position of CEO and one other board position when the existing contracts expire in August.

Chief Financial Officer Siegfried Mayrhofer, who has been in TA’s pay since March 2000, has already announced his departure. The chairmanship of the board then goes to AMX, the second board may nominate ÖBAG, the third post is saved. ÖBAG may continue to appoint the chairman of the supervisory board and another supervisory board. There will also be a syndicate agreement for the new cell tower company, which will contain parallel provisions.

Corruption and expensive frequencies made A1 a takeover target

Carlos Slim joined TA in 2012. It was marked by years of corruption and a questionable entry into the market of the dictatorship of Belarus. After a very expensive campaign for Austrian LTE frequencies in 2013, TA was so stricken that Slim was able to take over the regional group A1 Telekom Austria in 2014. At EUR 7.15 per share, his takeover bid was not lavish, but it was enough. This Monday evening, TA shares reached EUR 6.21 on the Vienna Stock Exchange.

When Slim’s share roughly corresponded to that of the Republic Holding ÖIAG (today ÖBAG), the first syndicate agreement between the two shareholders was concluded in April 2014 under embarrassing circumstances. ÖIAG had problems drumming up enough supervisory board members before a legal deadline to be able to sign the contract. The five employee representatives boycotted the meeting because they rejected the syndicate agreement and three capital representatives were away.

This means that only six of the 15 supervisory board members actually attended – one too few for a valid resolution. A board member was flown in at the last minute so the papers could be signed just before midnight. América Móvil thus took over power at A1 Telekom Austria. Slim continued to buy TA shares, so that in the same year América Móvil was able to take over the majority of shares in A1 Telekom Austria.

(ds)

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