Bell to buy big Mexican phone stake

BELL ATLANTIC, the US regional telephone utility, will spend as much dollars 1.04bn to acquire a large minority stake in Mexico's largest cellular phone company, Grupo Iusacell, writes Larry Black.

Bell Atlantic will pay dollars 520m for an initial 23 per cent stake in Iusacell, which is controlled by Mexico's Peralta family. The Philadelphia-based 'Baby Bell' would later spend the same amount again to bring its holding in Iusacell to 42 per cent, providing certain conditions are met.

These may include ratification by the US of the North American Free Trade Agreement, which is expected to provide a strong stimulus to the Mexican economy. The two companies also mentioned plans to float another 10 per cent of the company, reducing the Peralta family's stake to less than 50 per cent.