Spanish telecommunications giant Telefonica sealed a strategic alliance with US-based Hicks, Muse, Tate & Furst Incorporated this week to jointly divide up a handful of media interests in Argentina.
Through an as yet unnamed new firm headed by Tom Hicks and Cesar Baez, CEI Citicorp Holdings - controlled by Hicks, Muse - will take a majority controlling stake in Argentina's Cablevision, the largest cable TV operator in Latin America.
Telefonica offshoot Telefonica Media emerges with controlling interest in the Argentinian telephone operator Compania de Inversiones de Telefonica (Cointel) and in Atlantida Comunicaciones (ATCO), owner of free-TV channels Telefe and Canal 9 as well as ten regional TV channels and two leading radio stations. CEI shareholders, in exchange, take a stake in Telefonica.
The transaction, valued at $4bn, should be completed by February. The move fortifies Telefonica Media's objective for expansion into the Latin American market, and plans to develop interactive digital television services.
Collaborations between its new interests and its Spanish media holdings, including free TV channel Antena 3 and digital satellite platform Via Digital, are likely. Telefonica Media is expected to float shares on the international stock market in months to come.