NEW YORK (TheStreet) -- Shares of America Movil SAB de CV (AMX) are higher by 3.95% to $21.56 in pre-market trading after the company announced yesterday that it will sell some assets to "reduce its national market share in the Mexican telecommunications market under 50%."
Mexican billionaire Carlos Slim agreed to the breakup of the company's Mexican phone operations in order to avoid restrictions placed on America Movil due to its dominance in the market, which would damage profits, Bloomberg reports.
American Movil is the largest operator in the Americas with 272 million wireless subscribers.
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Slim and his family own 57% of America Movil, and agreed to separate its wireless towers from the rest of the business, while also giving up its rights to buy the satellite TV provider Dish Mexico (DISH), Bloomberg added.
America Movil will divest some assets to a newly formed independent company, as part of its effort to appease Mexico's Congress, which was debating a bill that would impose harsh penalties on industry dominant companies.
Separately, TheStreet Ratings team rates AMERICA MOVIL SA DE CV as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate AMERICA MOVIL SA DE CV (AMX) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and generally higher debt management risk."