Form 425
Table of Contents

Filed by: América Móvil, S.A.B. de C.V.

Pursuant to Rule 425 under the Securities Act of 1933

Subject Company: Telmex Internacional, S.A.B. de C.V.

Commission File No. 001-34086

Below is an English translation of the preliminary disclosure statement that América Móvil, S.A.B. de C.V. (“América Móvil”) filed with the Comisión Nacional Bancaria y de Valores (“CNBV”) in Mexico on April 29, 2010 in connection with its previously-announced offer to acquire all shares of Telmex Internacional, S.A.B. de C.V. (the “Offer”). América Móvil is submitting this information solely because this information has been made public in Mexico. The information set forth below is not complete and may be changed. This document does not constitute an offer to sell any securities in the United States, Mexico, or elsewhere. No securities may be offered or sold in the United States, Mexico or any other jurisdiction, unless registered or exempted from registration therein.

América Móvil has not yet commenced the Offer and the terms of and the disclosure with respect to the Offer when it is commenced may differ from the information set forth below. In addition, América Móvil will file a separate registration and tender offer statement in connection with the Offer with the U.S. Securities and Exchange Commission, which will govern the Offer with respect to holds of securities of Telmex Internacional that reside in the United States.

********************

In connection with the proposed transaction, América Móvil, S.A.B. de C.V. (“América Móvil”) will file with the U.S. Securities and Exchange Commission (the “SEC”) a Registration Statement on Form F-4 that will include a prospectus and a tender offer statement. Investors and security holders are urged to read the prospectus and tender offer statement regarding the proposed transaction when it becomes available because it will contain important information. You may obtain a free copy of the prospectus and tender offer statement (when available) and other related documents filed by América Móvil with the SEC at the SEC’s website at www.sec.gov.

This document contains certain forward-looking statements that reflect the current views and/or expectations of América Móvil and its management with respect to its performance, business and future events. We use words such as “believe,” “anticipate,” “plan,” “expect,” “intend,” “target,” “estimate,” “project,” “predict,” “forecast,” “guideline,” “should” and other similar expressions to identify forward-looking statements, but they are not the only way we identify such statements. Such statements are subject to a number of risks, uncertainties and assumptions. We caution you that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in this release. América Móvil is under no obligation and expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.


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Preliminary Disclosure Statement

Dated April 29, 2010

 

The information contained in this preliminary disclosure statement is subject to modification, amendment, supplement, clarification or substitution.

An updated version of this preliminary disclosure statement, including any modification, amendment, supplement, clarification or substitution made hereto between the date hereof and the date of the offer described herein, will be available for consultation at the world wide web addresses of the Mexican Stock Exchange and Mexico’s National Banking and Securities Commission,

www.bmv.com.mx, and

www.cnbv.gob.mx,

respectively. In addition, any such change in this preliminary disclosure statement shall be disclosed to the public through the Securities Issuers Electronic Communications System (Sistema Electrónico de Comunicación con Emisoras de Valores, or EMISNET), at

http://emisnet.bmv.com.mx.

The purchase offer subject matter of this preliminary disclosure statement may not be consummated until such time as Mexico’s National Banking and Securities Commission shall have granted its approval therefor pursuant to Mexico’s Securities Market Law. This preliminary disclosure statement does not constitute an offer to purchase the securities described herein.


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Preliminary Disclosure Statement

Dated April 29, 2010

 

PUBLIC OFFER TO PURCHASE UP TO ALL OF THE 18,011,851,560 SHARES OF STOCK OF TELMEX INTERNACIONAL, S.A.B. DE C.V. (“TELINT” OR THE “ISSUER”),

LOGO

IN EXCHANGE FOR THE CONCURRENT SUBSCRIPTION BY TELINT’S SHAREHOLDERS OF UP TO 2,638,509,332 SERIES L LIMITED-VOTING SHARES, NO PAR VALUE, ISSUED IN REGISTERED FORM, REPRESENTING APPROXIMATELY [8.2]% OF THE OUTSTANDING CAPITAL STOCK OF AMÉRICA MÓVIL, S.A.B. DE C.V. (“AMX”) AS OF THE DATE HEREOF, OR, AT THE ELECTION OF SUCH SHAREHOLDERS, IN EXCHANGE FOR 11.66 MEXICAN PESOS (“PESOS” OR “Ps.”) IN CASH, FOR EACH SHARE TENDERED BY THEM.

LOGO

AMX is offering to purchase up to all of the outstanding shares of stock of TELINT, consisting of 18,011,851,560 Series A and Series L shares, concurrent with the subscription by TELINT’s shareholders of up to 2,638,509,332 Series L limited-voting shares, no par value, issued in registered form, representing approximately 8.2% of the outstanding capital of AMX as of the date hereof, or, at the election of such shareholders, for a Purchase Price of Ps.11.66 in cash for each share tendered by them. The exchange ratio is 0.373:1 and, as a result, TELINT’s shareholders may subscribe up to 0.373 Series L shares of AMX as part of the Offer, in exchange for each TELINT share tendered by them.

 

 

 

Issuer:   TELMEX Internacional, S.A.B. de C.V.   América Móvil, S.A.B. de C.V.
Trading symbol:   TELINT   AMX
Number of shares outstanding prior to the Offer:   18,011,851,560 shares   32,108,530,456 shares
Number of shares included in the Offer and the U.S. Offer:   Up to 18,011,851,560 shares   Up to 2,638,509,332 Series L AMX
shares to be subscribed as
part of the Offer.
Number of shares outstanding upon completion of the Offer:  

18,011,851,560 shares

  39,237,096,526 shares, assuming that
    all participants will elect the cash option;
or 41,875,605,858 shares if all
participants elect to receive AMX shares.
Purchase price:   Ps.11.66 per share.
Exchange ratio:   0.373 Series L shares of AMX for each TELINT share tendered in
connection with the Offer.
Aggregate price in the Offer and the U.S. Offer:   The aggregate price will depend on the number of shares subscribed in connection with the Offer, subject to a maximum of 2,638,509,332 Series L shares available in AMX’s treasury, or approximately Ps.82.5 billion in cash.
Offering period:   April [], 2010, to May [], 2010.
Date of registration with the BMV:   May [], 2010.
Settlement date:   May [], 2010.
Announcement of the outcome of the Offer:  

[], 2010

Date of publication of notice of the Offer:  

A notice with respect to the Offer will be published in a national newspaper upon commencement of the Offer and every three days throughout the Offering Period.

AMX’s capital structure:  

Authorized, paid-in capital as of the date hereof:

  Ps.267,571,086.89

Authorized, paid-in capital following the Offer:

  Ps.348,963,381.83

Aggregate number of authorized, paid-for shares as of the date hereof:

  32,108,530,456 shares

Authorized Series AA shares outstanding immediately prior to and following completion of the Offer:

  11,712,316,330 shares

Authorized Series A shares outstanding immediately prior to and following completion of the Offer:

  445,330,920 shares

Authorized, paid-for Series L shares as of the date hereof:

  19,950,883,216 shares

Maximum number of authorized Series L shares outstanding upon completion of the Offer (including the TELECOM Offer):

  27,079,449,276 shares

Maximum aggregate number of authorized shares outstanding upon completion of the Offer (including the TELECOM Offer):

  41,875,605,858 shares

For additional information regarding AMX’s capital structure following the Offer, see Section 14 of this Disclosure Statement, “Consequences of the Offer.”

 

 

The U.S. Offer: AMX intends to commence a tender offer in the United States, pursuant to U.S. law (including, in particular, the U.S. Securities Act of 1933), for the same 18,011,851,560 Series A and Series L subject matter hereof, including all securities representing such shares, in substantially the same terms and conditions of this Offer, including as to term, purchase price and exchange factor. The maximum aggregate number of shares subject to such offer is 2,638,509,332 Series L AMX Shares, or approximately Ps.82.5 billion. There is no intermediary in the U.S. Offer, and the exchange agent for purposes thereof would be The Bank of New York Mellon. The U.S. Offer constitutes a separate offer and is not subject to this Disclosure Statement.

Additional Payments: AMX hereby represents, under penalty of perjury, that it has made no payment arrangements other than for the consideration payable in connection with this Offer, including the exchange factor and reference price described in this Disclosure Statement.

Exchange Procedure: (1) Any TELINT shareholder who may wish to participate in the Offer and who may be holding his/her TELECOM shares through a Custodian (as such term is defined in “Glossary of Defined Terms” in this Disclosure Statement) with an account at S.D. Indeval, Institución para el Depósito de Valores, S.A. de C.V. (“Indeval”), must within the offering period give to such Custodian written notice of his/her decision to accept the Offer and instruct such Custodian to sell his/her TELINT shares and his/her election to either (i) allocate, concurrently, the proceeds of such sale to subscribe the Series L shares of AMX, or (ii) receive Ps. 11.66 in cash, for each TELINT share tendered by them (the “Purchase Price”). The Custodians will consolidate all the instructions received from their clients and deliver to Inversora Bursátil, S.A. de C.V., Casa de Bolsa, Grupo Financiero Inbursa (“Inbursa” or the “Underwriter”), a duly completed Acceptance Letter (as such term is defined in “Glossary of Defined Terms” in this Disclosure Statement) identifying the TELINT Shares being tendered by each of them, in the manner prescribed in the following paragraph. All Acceptance Letters must be duly completed, signed and delivered via courier, return receipt requested, to Inbursa’s offices located at Paseo de las Palmas 736, Colonia Lomas de Chapultepec, Delegación Miguel Hidalgo, 11000 Mexico D.F., Att.: Mr. Gilberto Pérez Jiménez, telephone +(5255) 5625-4900 ext. 1547, fax +(5255) 5259-2167. Business hours for purposes of such delivery shall be from 9:00 a.m. to 2:00 p.m., and from 4:00 p.m. to 6:00 p.m., Mexico City time during all business days of the Offering Period, except for the Expiration Date, in which business hours shall be from 9:00 a.m. to 4:00 pm., Mexico City time; (2) Custodians must transfer all relevant TELINT Shares to account No. 2501, maintained by Inbursa at Indeval, not later than by 4:00 p.m. (Mexico City time) on May [], 2010. Any shares transferred or delivered to such account after such time shall be excluded from the Offer; (3) Any TELINT shareholder who may be holding his/her TELINT shares in the form of physical certificates must make arrangements with the Custodian of his/her choice for purposes of participating in the Offer, or surrender his/her duly endorsed stock certificates at Inbursa’s offices located at Paseo de las Palmas 736, Colonia Lomas de Chapultepec, Delegación Miguel Hidalgo, 11000 Mexico D.F., Att.: Gilberto Pérez Jiménez, during the hours set forth in the paragraph 1 above and not later than by 4:00 p.m. (Mexico City time) on May [], 2010; and (4) On May [], 2010, Inbursa will transfer to each Custodian’s account at Indeval, (i) the number of AMX Series L shares issued in exchange for the TELINT shares received from or transferred by them as set forth hereinabove, OR (ii) the Purchase Price. The acceptance of the Offer as evidenced by the transfer of any TELINT shares to account No. 2501 at Indeval as described above, shall for all applicable purposes become irrevocable as of May [], 2010, after 4:00 p.m., Mexico City time. As a result, no such shares may be withdrawn from such account subsequent to their transfer thereto. See section 5(k) of this Disclosure Statement, “The Offer—Exchange Procedure.”

Conditions: The Offer is subject to various conditions, as described in Section 8 of this information memorandum for the purchase and concurrent subscription offer (this “Disclosure Statement”). Such conditions include, among others, the receipt of certain corporate and regulatory approvals, some of which have been heretofore obtained by AMX and/or TELINT. Among other


Table of Contents

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Preliminary Disclosure Statement

Dated April 29, 2010

 

things, the Offer is conditioned upon the successful acquisition by AMX of at least 51% (fifty one percent) of the shares of stock of Carso Global Telecom, S.A.B. de C.V. (“TELECOM”) in connection with a purchase and subscription offer commenced by AMX concurrently herewith (the “TELECOM Offer”); provided, that AMX will only invoke such condition upon TELECOM’s shareholders becoming subject to any regulatory or other restriction precluding their participation in the Offer; and provided, further, that the satisfaction of such condition will not be subject to the sole discretion of TELECOM’s shareholders. In addition, the TELECOM Offer is conditioned upon the absence of any legal or other restriction precluding TELECOM’s shareholders’ ability to participate in the TELECOM Offer. In the event that the conditions set forth in this Disclosure Statement are not met and/or waived by AMX, the Offer shall have no legal effect whatsoever. In such event, AMX will disclose the corresponding relevant events through the Emisnet system operated by the Mexican Stock Exchange (Bolsa Mexicana de Valores, S.A.B. de C.V.) (“BMV”),

Extension of the Offering Period: As described in Section 5(k)(iii) of this Disclosure Statement, “The Offer—Exchange Procedure—Extension of the Offering Period,” under applicable law the offering period is subject to one or more extensions in accordance with Section 5(j)(iii) of this Disclosure Statement, at AMX’s sole discretion and/or in the event of any material change in the terms of the Offer; provided, that the period of any extension as a result of any such change shall be not less than five (5) business days. In addition, the Offer may be extended by resolution of Mexico’s National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores) (the “CNBV”) pursuant to the last paragraph of Article 101 of Mexico’s Securities Market Law (Ley del Mercado de Valores) (the “LMV”).

Right to Withdraw: Any shareholder who may have accepted the Offer will have the right to withdraw his/her acceptance at any time prior to 4:00 p.m. Mexico City time of Expiration Date (as such term is defined in “Glossary of Defined Terms” in this Disclosure Statement), including as a result of any relevant change in the terms of the Offer or upon receipt of one or more competitive offers (the “Withdrawal Right”). To such effect, the relevant Custodian shall give the Underwriter, prior to the Expiration Date, written notice of the exercise of the Withdrawal Right by such shareholder. The relevant acceptance will be deemed withdrawn upon receipt of such notice by the Underwriter. Notices of exercise of the Withdrawal Rights are not subject to revocation and, accordingly, the shares so withdrawn will not be included in the Offer.

Notwithstanding the above, any TELINT shares so withdrawn may be subsequently retendered in connection with the Offer at any time prior to the Expiration Date, subject to the satisfaction of the conditions set forth in Section 5(k)(ii) of this Disclosure Statement, “The Offer—Exchange Procedure—Conditions for the Acceptance of the Shares.” Any question as to the form and validity (including the time of receipt) of any withdrawal notice will be decided by AMX through the Underwriter, and such decision will be final and binding. AMX may waive any right, defect or irregularity in connection with the withdrawal of any acceptance by any TELINT shareholder, depending upon its significance.

The exercise of the Withdrawal Rights will not be subject to any penalty. Any TELINT shareholder may exercise his/her Withdrawal Right in the manner prescribed in this Disclosure Statement and, particularly, in Section 5(n) hereof, “Withdrawal Rights.”

Opinion of TELINT’s Board of Directors: As disclosed by TELINT on March 19, 2010, its Board of Directors, taking into consideration the independent expert opinion of Merrill Lynch, Pierce, Fenner & Smi8th Incorporated or its affiliates (“Merrill Lynch”), who was engaged by TELINT’s Board of Directors, and the opinion of TELINT’s Audit and Corporate Governance Committee, determined that the exchange ratio and the Purchase Price determined for purposes of the Offer are fair and reasonable from a financial standpoint. For additional information, see Section 18 of this Disclosure Statement, “Opinions of the Board of Directors and the Independent Expert.”

Opinion of TELINT’s Independent Expert Advisor: As disclosed by TELINT on March 19, 2010, TELINT’s Audit and Corporate Governance Committee confirmed Merrill Lynch’s appointment as independent expert engaged by TELINT’s Board of Directors for purposes of the issuance of an opinion as to the financial fairness of the exchange ratio and the Purchase Price proposed in connection with the Offer. Based upon the facts disclosed thereto, and the other considerations described in its opinion, a copy of which is attached hereto as Exhibit 26(b), Merrill Lynch advised TELINT’s Board of Directors that the exchange ratio and the Purchase Price offered to TELINT’s shareholders are fair. Recipients of this Disclosure Statement are advised to review Exhibit 26(b) hereto to fully understand such opinion, including the facts upon which it is based and any qualifications thereto.

Opinion of AMX’s Financial Advisor, and Independent Expert for Mexican law purposes: On January 13, 2010, AMX’s Board of Directors issued a favorable opinion with respect to the commencement of the Offer by AMX, and resolved, among other things, to authorize AMX to retain a financial advisor as independent expert for purposes of the Offer (and also to act as independent expert fur purposes of, and in accordance with, Mexican law). On February 9, 2010, AMX’s Audit and Corporate Governance Committee issued a favorable opinion with respect to the commencement of the Offer by AMX. Likewise, it resolved, among other things, to ratify the appointment of Credit Suisse Securities (USA) LLC (“Credit Suisse”). Said appointment was approved by AMX’s Board of Directors on January 13, 2010. In connection with the Offer, Credit Suisse was requested (in its capacity as independent expert advisor engaged by AMX’s Board of Directors, in accordance with, and for purposes of, Mexican law) to issue for the information of AMX’s Board of Directors its opinion, from a financial standpoint, as to the financial fairness of the consideration, in cash or in AMX Shares, offered by AMX to TELINT’s shareholders in connection with the Offer. On March 9, 2010, Credit Suisse issued its opinion to AMX Board of Director’s, stating that, as of the date thereto and, based upon the facts disclosed therein, and on other considerations included therein, a copy of which is attached hereto as Exhibit 26(a), the consideration, in cash of in AMX Shares offered to TELINT’s shareholders is reasonable from a financial standpoint to AMX. The opinion was issued solely for the information of AMX’s Board of Directors for purposes of evaluating the Offer from a financial standpoint and not for the benefit of shareholders and is subject to several presumptions, qualifications, limitations and considerations. The opinion does not deal in any way with other aspects of the Offer, and does not purport to be a recommendation, and shall not be understood as a recommendation to the shareholders in connection with their participation in the Offer or any other matter.

Cancellation of Registration: Assuming that TELINT’s shareholders will elect to tender their shares in connection with the Offer, AMX intends to purchase up to 100% (one hundred percent) of the TELINT Shares and may file a petition to cancel the registration of such shares with Mexico’s National Securities Registry (RNV Nacional de Valores) (“RNV”) and their registration for trading on the BMV, subject to the consent of at least 95% (ninety five percent) of TELINT’s shareholders. Contingent upon the outcome of the Offer, following the consummation thereof and subject to the satisfaction of all the conditions set forth in the applicable laws to ensure the protection of the public’s interests, and the approval of the requisite corporate actions, AMX intends to file with the CNBV a petition to cancel the registration of the TELINT Shares with the RNV and the BMV, so that such shares will no longer trade therein. Upon satisfaction of the conditions set forth in the applicable laws to obtain the cancellation of the registration of the Series A-1 shares of TELECOM, if a petition to obtain such cancellation is filed with and approved by the CNBV, AMX will establish a trust or conduct a subsequent offer in accordance with the applicable laws. THERE CAN BE NO ASSURANCE TO THE EFFECT THAT EITHER SUCH ACTION WILL BE TAKEN OR, IF SO, AS TO THE DATE THEREOF. For additional information, see Section 17 of this Disclosure Statement, “Maintenance or Cancellation of Registration.”

Tax Considerations: The sale of the TELINT Shares to AMX, and the concurrent subscription of the Series L shares of stock of AMX, are subject to the provisions contained in Articles 60, 109(XXVI) and 190 of Mexico’s Income Tax Law and other applicable tax laws. The summary of tax considerations included in this Disclosure Statement does not purport to contain a complete or detailed description of the Mexican tax provisions applicable to TELINT’s shareholders. In addition, such summary may not be applicable to certain shareholders in light of their particular circumstances. Accordingly, TELINT’s shareholders are advised to consult with their own independent tax experts as to the tax consequences associated with their participation in the Offer, including those arising as a result of their particular circumstances.

Prospective Participants: The Offer is extensive to all holders of TELINT’s Series A and Series L shares as of the last day of the Offering Period. Section 5(k) of this Disclosure Statement, “The Offer—Exchange Procedure,” sets forth the procedure in accordance with which the holders of TELINT’s Series AA shares will be able to participate in the Offer.

Use of Proceeds: Not applicable. AMX will not receive any of the proceeds of the Offer and will allocate such proceeds to purchase 100% (one hundred percent) of the outstanding shares of stock of TELINT as of the date hereof.

Depositary: Indeval.

Over-allotment Options: None.

Other Transactions: Concurrently with the Offer, AMX intends to commence the TELECOM Offer.

AMX Shares: The shares being offered by AMX in exchange for the TELINT Shares, in lieu of the purchase price in cash, in connection with the Offer, consist of Series L limited-voting shares of the capital stock AMX. Accordingly, holders of AMX’s Series L shares will not have the same rights as holders of other series of stock of AMX and may be deemed to be at disadvantage. For additional information regarding AMX’s Series L shares, see sections 15 and 16 of this Disclosure Statement, “Risk Factors” and “Rights of the Shareholders,” respectively.

UNDERWRITER

LOGO

Inversora Bursátil, S.A. de C.V., Casa de Bolsa Grupo Financiero Inbursa

TELINT’s shares are registered with the RNV and are listed for trading on the BMV.

The AMX Series L shares to be subscribed as part of the Offer in accordance with this Disclosure Statement are registered with the RNV under registration number 2723-1.00-2010-003, and are listed for trading on the BMV.

Registration with the RNV does not imply any certification as to the quality of the securities, the solvency of the issuer, or the accuracy or truthfulness of the information contained in this Disclosure Statement, nor does it validate any act carried out in violation of the law.

 

Mexico City, [], 2010.   CNBV Aut. No. [], dated [], 2010.

This Disclosure Statement is available for consultation at the web addresses of the BMV and AMX, www.bmv.com.mx and www.americamovil.com, respectively.


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Preliminary Disclosure Statement

Dated April 29, 2010

 

TABLE OF CONTENTS

 

         Page

1.

  FREQUENT Q&A    7

2.

  NAME AND ADDRESS OF AMX AND THE ISSUER    15

3.

  INFORMATION CONCERNING AMX    17

4.

  RELATIONSHIP BETWEEN AMX AND THE ISSUER    19

5.

  THE OFFER    20

a.

  Summary    20

b.

  Number and Characteristics of the Shares to be Purchased    21

c.

  Percentage of the Issuer’s Capital Represented by the Shares Included in the Offer    21

d.

  Number of Shares and Over-allotment Options    21

e.

  Purchase Price and Basis for the Determination Thereof    21

f.

  Aggregate Amount of the Offer    23

g.

  Recent Price/Book Value Multiples    23

h.

  Recent Price/Net Income Multiples    23

i.

  Market Multiples    24

j.

  Other Multiples    24

k.

  Offering Period    24

l.

  Exchange Procedure    24

m.

  Settlement Date    26

n.

  Summary Resolutions of the Board of Directors of AMX in Connection with the Commencement
of the Offer
   26

o.

  Withdrawal Rights    27

6.

  UNDERWRITER    28

7.

  MARKET INFORMATION    28

8.

  CONDITIONS FOR THE OFFER    31

9.

  ARRANGEMENTS PREDATING THE OFFER    33

10.

  INTENT    44

11.

  PURPOSE AND FUTURE PLANS    45

12.

  CAPITAL RESOURCES    48

13.

  CAPITAL STRUCTURE    50

14.

  CONSEQUENCES OF THE OFFER    51

15.

  RISK FACTORS    53

16.

  RIGHTS OF THE SHAREHOLDERS    57

a.

  The TELINT Shares    57

b.

  The AMX Shares    57

17.

  MAINTENANCE OR CANCELLATION OF THE REGISTRATION    60

18.

  OPINIONS OF THE BOARD OF DIRECTORS AND THE INDEPENDENT EXPERTS    63

a.

  Opinion of TELINT’s Board of Directors    63

b.

  Opinion of the Independent Expert Retained by TELINT    63

c.

  Opinion of AMX’s Financial Advisor, and Independent Expert for Mexican law purposes    63

19.

  TRUST FOR THE ACQUISITION OF SHARES SUBSEQUENT TO THE CANCELLATION
OF THE REGISTRATION
   65

20.

  TAX CONSIDERATIONS    66

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

21.

  LEGAL CONDITIONS    68

22.

  RECENT DEVELOPMENTS    68

23.

  ADDITIONAL INFORMATION    69

24.

  INFORMATION REQUIRED BY EXHIBIT H OF THE GENERAL RULES    96

25.

  SIGNATURES    109

26.

  EXHIBITS    116

Exhibit 26(a) — Opinion of Credit Suisse

   116

Exhibit 26(b) — Opinion of Merrill Lynch

   120

Exhibit 26 (c) Form of Acceptance Letter

   125

Exhibit 26(d) AMX’s Pro Forma Financial Statements

   127

Exhibit 26(e) Legal Opinion

   142

Exhibit 26(f) AMX’s Additional Report Dated March 22, 2010

   147

Exhibit 26(g) AMX’s Additional Report Dated April 2, 2010

   179

Exhibit 26(h) TELINT’s Recent Developments Report

   309

Exhibit 26(i) TELMEX’s Recent Developments Report

   411

Exhibit 26(j) Form of Global Share Certificate

   503

Exhibit 26(k) 2009 Audited Financial Statements

   504

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

Notice to Investors

No intermediary, person authorized to engage in transactions with the public, or any other person, has been authorized to provide information or make any representation not contained in this Disclosure Statement. Accordingly, any information or representation not contained herein must be construed as not authorized by AMX and/or the Underwriter.

The Offer contains forward-looking statements. Such statements are contained throughout this Disclosure Statement and include statements with respect to the current intentions, considerations or expectations of AMX and its management, including statements with respect to its strategy following the consummation of the Offer and its plans with respect to the acquisition of all of the shares of stock of TELINT. Such forward-looking statements involve risks and uncertainties that could materially affect us and cause our actual results to significantly differ from those described in our forward-looking statements as a result of various factors. Such factors include, without limitation, the condition of the economy, the political situation, the rates of inflation, the exchange rates, and any change in the existing laws and governmental policies of Mexico and other relevant markets. In this Disclosure Statement, such forward-looking statements may be identified in some instances by the use of words such as “believe,” “anticipate,” “plan,” “expect,” “intend,” “target,” “estimate,” “project,” “predict,” “forecast,” “guideline,” “should,” and other similar expressions, but they are not the only way used to identify such statements.

Forward-looking statements are based on the facts known as of the date on which they are made, and AMX and/or the Issuer do not undertake any obligation to update such statements in light of new information or future developments, other than the obligation to disclose the occurrence of any relevant event. Neither AMX nor the Issuer can guarantee that the Offer will be consummated in the terms described in this Disclosure Statement or at all. Similarly, no guarantee can be given as to the results, levels of activity, performance or future success of AMX, TELINT and/or their respective subsidiaries and affiliates.

You will not be subject to any brokerage fees and/or commissions whatsoever as a result of your participation in the Offer, other than for any commission payable under any arrangement between you and your Custodian. We advise you to consult in advance with your Custodian as to the applicability of any commission and/or charge by reason of any transaction and/or service performed by your Custodian in connection with the acceptance of the Offer.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

GLOSSARY OF DEFINED TERMS

Unless otherwise defined in the cover page of this Disclosure Statement or as the context may otherwise require, the following terms shall have the following meanings, which shall be applicable to both the singular and plural forms thereof:

 

Term

 

Definition

 

“Acceptance Letter”

The document to be completed and delivered to the Underwriter by each Custodian, containing such Custodian’s express consent to participate in the Offer in the name and on behalf of its clients, substantially in the form of Exhibit 26(c) hereto.

 

“Adverse Governmental Action”

The issuance, enactment, promulgation or execution by any public authority of any law, rule, provision, norm, decree, resolution or order (a) preventing or prohibiting the conduction and/or consummation of the Offer, (b) which may have a material adverse effect on the terms and/or conditions of the Offer, (c) imposing material restrictions on the ability of AMX (or any of its affiliates) to successfully acquire, preserve or exercise in full its ownership rights in respect of the TELINT Shares purchased thereby in connection with the Offer, including, without limitation, the voting rights pertaining to the TELINT Shares, (d) prohibiting, restricting, rendering or seeking to render unlawful any payment in exchange for or the purchase of the TELINT Shares, or the concurrent subscription of the Series L shares of stock of AMX in the terms contemplated by the Offer, or imposing material liabilities for any damages and/or losses as a result thereof, (e) restricting or limiting TELINT’s business operations, (f) imposing or seeking to impose any material condition for the Offer in addition to those set forth in this Disclosure Statement, or giving rise to the commencement of any action, proceeding, claim or complaint seeking to achieve any of the above, or (g) limiting the participation of any shareholder in the Offer.

 

“AMX Shares”

All or any of the up to [2,638,509,332] Series L limited-voting shares, no par value, issued in registered form, representing approximately 8.2% (eight point two percent) of the outstanding capital of AMX as of the date hereof, to be subscribed by the participants in the Offer; provided, that the AMX Shares are not and shall not be deemed to be included in the Offer but shall be deemed to constitute an integral element of the Offer.

 

AMX’s Additional Reports”

(i)

The additional report containing AMX’s selected financial information and discussion and analysis of its financial condition, results of operations and prospects, together with AMX’s audited consolidated financial statements as of and for the year ended December 31, 2009, prepared in accordance with Mexican financial reporting principles, released by AMX through the BMV on March 22, 2010, which report is available for inspection at AMX’s Internet page, www.americamovil.com. For ease of reference, a copy of such report is attached hereto as Exhibit 26(f); and

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

  (ii) The additional report containing AMX’s selected financial information and discussion and analysis of its financial condition, results of operations and prospects, together with AMX’s audited consolidated financial statements as of and for the year ended December 31, 2009, prepared in accordance with Mexican financial reporting principles, released by AMX through the BMV on April 2, 2010, which report is available for inspection at AMX’s Internet page, www.americamovil.com. For ease of reference, a copy of such report is attached hereto as Exhibit 26(g).

 

“AMX’s Annual Report”

AMX’s annual report for the year ended December 31, 2008, as filed with the CNBV and the BMV on June 30, 2009, in accordance with the General Rules.

 

“AMX’s Quarterly Report”

AMX’s report for the fourth quarter of 2009, as filed with the CNBV and the BMV on February 2, 2010, in accordance with the General Rules.

 

“Commencement Date”

April [], 2010.

 

“Custodian”

Any brokerage firm, credit institution or other depositary institution authorized to maintain direct deposits with Indeval, entrusted with the safe-keeping and custody of securities in the name and on behalf of the recipients of the Offer.

 

“Disclosure Statement”

This disclosure statement concerning the purchase and subscription offer described herein.

 

“Expiration Date”

May [], 2010, unless extended upon exercise of the rights described in Section 5(k)(iii) of this Disclosure Statement, “The Offer—Exchange Procedure—Extension of the Offering Period.”

 

“General Rules”

The General Provisions Applicable to Issuers and Other Participants in the Securities Market, issued by the CNBV and published in Mexico’s Official Gazette on March 19, 2003 (as amended by any subsequent publication therein.)

 

“Global Account”

Account No. 2501, maintained by the Underwriter with Indeval.

 

“Mexico”

The United Mexican States.

 

“Offer”

The purchase and subscription offer described in this Disclosure Statement.

 

“Offering Period”

The 20 (twenty) business-day period beginning on the Commencement Date, unless extended upon exercise of the rights described in Section 5(k)(iii) of this Disclosure Statement, “The Offer—Exchange Procedure—Extension of the Offering Period.”

 

“Other Reports”

(i)

The Recent Developments Report containing TELINT’s audited consolidated financial statements as of and for the year ended December 31, 2009, released by TELINT

 

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Dated April 29, 2010

 

  through the BMV on March 24, 2010, which report is available for inspection at TELINT’s Internet page, www.telmexinternacional.com. For ease of reference, a copy of such report is attached hereto as Exhibit 26(h); and

 

  (ii) The Recent Developments Report containing TELMEX’s audited consolidated financial statements as of and for the year ended December 31, 2009, released by TELMEX on March 23, 2010, which report is available for inspection at TELMEX’s Internet page, www.telmex.com. For ease of reference, a copy of such report is attached hereto as Exhibit 26(i).

 

“Pesos” or “Ps.”

Pesos, legal tender of Mexico.

 

“Registration Date”

May [], 2010.

 

“SEC”

The U.S. Securities and Exchange Commission.

 

“Settlement Date”

May [], 2010.

 

“Slim Family”

Mr. Carlos Slim Helú and his immediate family members.

 

“TELECOM Shares”

All or any of the approximately [3,481,765,200] Series A-1 full-voting shares, no par value, issued in registered form, representing 100% (one hundred percent) of the outstanding capital stock of TELECOM as of the date hereof, which are the subject matter of the TELECOM Offer.

 

“TELINT Shares”

All or any of the [18,011,851,560] shares representing 100% (one hundred percent) of the outstanding capital stock of TELINT as of the date hereof.

 

“TELINT’s Annual Report

TELINT’s annual report for the year ended December 31, 2008, as filed with the CNBV and the BMV on June 30, 2009, in accordance with the General Rules.

 

“TELINT’s Quarterly Report”

TELINT’s report for the fourth quarter of 2009, as filed with the CNBV and the BMV on February 18, 2010, in accordance with the General Rules, as resubmitted on February 19, 2010.

 

“TELMEX”

Teléfonos de México, S.A.B. de C.V.

 

“U.S. Offer”

The tender offer to purchase in the United States a number of TELINT Shares identical to the number of Series A and Series L shares of TELINT that are the subject matter of the TELINT Offer, including any securities representing such shares, in substantially the same terms and conditions as in the Offer, subject to the applicable U.S. laws.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

1. FREQUENT Q&A

Included below are the answers to some of the more frequent questions that a holder of TELINT Shares may have in connection with the Offer. We advise you to carefully read this Disclosure Statement in its entirety given that the information contained in this section is not complete and there may be additional material information in other sections of this Disclosure Statement.

 

A. Why is AMX conducting the Offer?

AMX is conducting the Offer to acquire, directly or indirectly, substantially all of the issued and outstanding shares of stock of TELINT, so as to combine the wireless telecommunication services it provides throughout Latin America, with voice, data, video, Internet access and other telecommunication services in Brazil, Colombia and certain other Latin American countries. Such business combination will enable AMX to provide more universally integrated services to its customers. AMX expects that the combined entity will enjoy of a strengthened position towards the major suppliers and will strengthen its research and development capabilities in the telecommunications and information industries. For additional information concerning AMX’s plans and objectives, see Section 11 of this Disclosure Statement, “Purpose and Future Plans.”

 

B. Is AMX conducting any other offer in respect of the TELINT shares, other than this Offer?

Yes. In addition to the Offer, AMX is conducting a separate offer for the TELINT shares in the United States. The Offer and the U.S. Offer are subject to substantially similar terms and conditions.

Also, in addition to the Offer and the U.S. Offer, AMX is conducting the TELECOM Offer. TELECOM is TELINT’s principal shareholder. TELECOM is a limited liability, variable capital public corporation (sociedad anónima bursátil de capital variable) organized under the laws of Mexico, whose sole purpose is that of a holding company. As of March 31, 2010, TELECOM owned approximately [71.6]% of the voting shares of stock of TELINT (which consisted of Series A and Series AA shares), and [60.7]% of the outstanding capital stock of TELINT.

 

C. Who is offering to purchase my securities?

América Móvil, S.A.B. de C.V., a limited liability, variable capital public corporation (sociedad anónima bursátil de capital variable) organized under the laws of Mexico, whose principal offices are located at Lago Alberto 366, Edificio Telcel I, Colonia Anáhuac, Delegación Miguel Hidalgo, 11320, México, Distrito Federal, Mexico. AMX’s telephone number at such location is +(5255) 2581-4719. For additional information regarding AMX, see Section 3 of this Disclosure Statement, “Information Concerning AMX.”

 

D. What are the Series and number of shares included in the Offer?

AMX is offering to purchase up to 100% (one hundred percent) of the outstanding shares of stock of TELINT, concurrent with the subscription by TELINT’s shareholders of up to 2,638,509,332 Series L shares of stock of AMX, as part of the Offer, based upon an exchange ratio of 0.373 AMX Shares for each TELINT Share or, at the election of such shareholders, for a Purchase Price of Ps.11.66 in cash.

 

E. Why is the Offer a concurrent offer?

AMX is offering to purchase from TELINT’s shareholders up to all of the outstanding shares of stock of TELINT, in exchange for the concurrent subscription of Series L AMX, based upon an exchange ratio of 0.373 AMX Shares for each TELINT Share or, at the election of such shareholders, Ps.11.66 in cash.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

F. Can I sell my TELINT Shares as part of the Offer, without purchasing any AMX Shares?

Yes. Any holder of TELINT Shares participating in the Offer shall have the right to (i) subscribe Series L AMX Shares based upon an exchange ratio of 0.373 Series L AMX Shares for each TELINT Share tendered by them, or (ii) receive the Purchase Price in cash.

 

G. Who is eligible to participate in the Offer?

Any individual and/or entity holding any TELINT Shares, subject to the procedure described in this Disclosure Statement; provided, that in order to participate in the Offer, the holders of the Series AA TELINT Shares will be required to first convert such Series AA shares into Series L shares of TELINT, unless on the Expiration Date the BMV shall allow for the trading and exchange of shares at the reference price determined for purposes of the Offer. For additional information, see Section 5(k) of this Disclosure Statement, “The Offer—Exchange Procedure.”

 

H. How much am I being offered for my securities and what are the applicable payment terms?

AMX is offering to purchase from TELINT’s shareholders up to all of the outstanding shares of stock of TELINT, in exchange for the concurrent subscription of Series L AMX, based upon an exchange ratio of 0.373 AMX Shares for each TELINT Share or, at the election of such shareholders, Ps.11.66 in cash.

For purposes of the above, AMX intends to use the Series L shares currently held by it as treasury shares, or its available cash resources, as the case may be. For additional information on AMX’s capital and other resources, see Section 12 of this Disclosure Statement, “Capital Resources.”

 

I. Will I be subject to any brokerage fees?

You will not be subject to any brokerage fees and/or commissions whatsoever as a result of your participation in the Offer, other than for any commission payable under any arrangement between you and your Custodian. We advise you to consult in advance with your Custodian as to the applicability of any commission and/or charge by reason of any transaction and/or service performed by your Custodian in connection with the acceptance of the Offer.

 

J. Does AMX have sufficient resources to pay for all the costs associated with the Offer?

AMX intends to use certain AMX Shares held thereby as treasury shares, to consummate the Offer. In addition, AMX intends to use its cash on hand and may draw from various credit facilities established for its benefit prior to the commencement of the offers. AMX has not made a final decision as to whether to arrange for an additional line of credit, issue securities or resort to other types of financing in connection with the Offer. Notwithstanding the above, the availability of such lines of credit or financings is not a prerequisite for the consummation of the Offer, including if all participants in the Offer elect the cash option. The consummation of the Offer is not contingent upon AMX’s ability to obtain any third-party financing. For additional information regarding the source and amount of AMX’s resources, see Section 12 of this Disclosure Statement, “Capital Resources.”

 

K. Is AMX’s financial condition relevant to my decision to participate in the Offer?

Yes. If you decide to participate in the Offer, you will receive Series L shares of AMX and, accordingly, you must assess and/or take into consideration AMX’s financial condition before making any decision to become a shareholder of AMX. To assess AMX’s financial condition, we encourage you to carefully review all the documents included or incorporated by reference in this Disclosure Statement, which contain detailed information on AMX’s business, financial condition and other matters.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

L. Has AMX obtained all the requisite approvals to conduct the Offer?

Yes. The Offer was approved by the CNBV on [•], 2010. In addition, on February 11, 2010, the Federal Competition Commission issued a favorable resolution in connection therewith. In addition, the Offer was approved by AMX’s shareholders meeting on March 17, 2010. For additional information on the conditions applicable to the Offer, see Section 8 of this Disclosure Statement, “Conditions for the Offer.”

 

M. What is AMX’s interest in TELINT?

As of the date of this Disclosure Statement, AMX does not have any equity interest in TELINT. AMX and the Issuer are engaged in the related party transactions described in Section 4 of this Disclosure Statement, “Relationship Between AMX and the Issuer.”

 

N. How much time do I have to decide whether or not to participate in the Offer?

You will have from April [•], 2010, or the Commencement Date, through 4:00 p.m. on May [•], 2010, or the Expiration Date; provided, that such period may be extended pursuant to Section 5(n) of this Disclosure Statement, “The Offer—Exchange Procedure—Extension of the Offering Period.”

 

O. What is the deadline for the surrender of my TELINT Shares?

The TELINT Shares can be surrendered at any time prior to the Expiration Date. If such shares are held through a Custodian, the Custodian will be required to execute an Acceptance Letter prior to the Expiration Date.

 

P. Can the Offer be extended and, if so, under what circumstances?

Pursuant to the applicable laws, the offering period is subject to extension on one or more occasions at AMX’s sole discretion and/or in the event of any material change in the terms of the Offer; provided, that the period of any extension as a result of any such change shall be not less than five (5) business days. In addition, the Offer may be extended by resolution of the CNBV pursuant to the last paragraph of Article 101 of the LMV. Any shareholder who may have accepted the Offer and tendered his/shares will be entitled to withdraw such acceptance if the Offer is extended for any reason beyond 4:00 p.m., Mexico City time, of the last day of any such extension. All extensions will be announced through the BMV’s EMISNET system and through publication in a national newspaper.

 

Q. How will I be notified of any extension?

AMX will give notice of any extension of the Offering Period to the Underwriter and will disclose such extension to the public through EMISNET and through publication in a national newspaper, not later than by 9:00 a.m., Mexico City time, on the business immediately succeeding the Expiration Date.

 

R. Is AMX paying any premium above market price?

No. The exchange ratio was determined based upon the closing price of the AMX Shares, the TELMEX Shares and the TELINT Shares during the 10 (ten) day trading period immediately preceding the announcement of the Offer by AMX’s Board of Directors, which period ended January 12, 2010, taking into consideration, also, TELECOM’s net debt. For additional information, see Section 5(e) of this Disclosure Statement, “The Offer—Purchase Price and Basis for the Determination Thereof.”

In addition, the payment of any controlling premium would be in violation of the applicable Mexican laws as currently in effect, and the price/net income ratio represented by the Purchase Price for the TELINT Shares is higher than the price/net income of the AMX Shares. AMX represents that it will not make any payment other than the consideration described in this Disclosure Statement, and that it has not undertaken any commitment or affirmative or negative covenant pursuant to Article 100 of the LMV, for

 

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Dated April 29, 2010

 

the benefit of either the Issuer or the holders of the securities it intends to purchase in connection with the Offer.

 

S. Is there any agreement regarding the participation of TELINT’s former controlling shareholders in the Offer?

AMX did not enter into any arrangement or agreement with any other buyer or any shareholder or director of TELINT prior to the announcement of the Offer.

On March 19, 2010, TELECOM’s Board of Directors resolved that TELECOM will not participate in the purchase and subscription offer extended to TELINT’s shareholders by AMX. On the other hand, and as TELECOM announced on March 19, 2010, those members of TELECOM´s Board of Directors who are also TELECOM shareholders, revealed their decision, as well as their related parties’ decision, to participate in the TELECOM Offer.

Based upon Merrill Lynch’s opinion as independent expert advisor engaged by TELINT’s Board of Directors, and the opinion of TELINT’s Audit and Corporate Governance Committee, both to the effect that the exchange ratio and the Purchase Price offered by AMX in connection with the Offer are justified from a financial standpoint and, accordingly, are fair to TELINT’s shareholders, TELINT’s Board of Directors determined that such financial ratio and Purchase Price are reasonable.

In addition, all members of TELINT’s Board of Directors holding TELINT Shares, have informed AMX that they and their related parties intend to participate in the Offer in the terms proposed by AMX, assuming that the economic situation and market conditions remain stable. To the best of AMX’s knowledge, TELINT’s Chief Executive Officer, Mr. Oscan Von Hauske, does not hold any TELINT Shares.

For additional information regarding the opinion of TELINT’s Board of Directors, see Section 18 of this Disclosure Statement, “Opinions of the Board of Directors and the Independent Experts.”

 

T. If I property tender my TELINT Shares within the Offering Period, will they all be accepted?

Yes.

 

U. Will the Offer be consummated if AMX acquires only a small portion of the TELINT Shares?

Yes. The Offer will be consummated regardless of the number of TELINT Shares acquired by AMX.

 

V. Who is the Underwriter, and what is the Indeval account number where my TELINT Shares must be deposited?

The Underwriter is Inversora Bursátil, S.A. de C.V., Casa de Bolsa, Grupo Financiero Inbursa. Its account number at Indeval is 2501, which is referred to herein as the Global Account.

 

W. How can I participate in the Offer if my TELINT Shares are held through a Custodian?

You must instruct your Custodian, in writing within the Offering Period, to transfer your TELINT Shares to the Global Account not later than by 4:00 p.m., Mexico City time, on the Expiration Date. For additional information, see Section 5(j) of this Disclosure Statement, “The Offer—Exchange Procedure.”

 

X. What should I do if I wish to sell a portion but not all of my TELINT Shares in connection with the Offer?

If you wish to participate in the Offer with only a portion of your TELINT interest, you must inform your Custodian of the number of TELINT Shares to be transferred to the Global Account in accordance with

 

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Dated April 29, 2010

 

the procedure described in Section 5(k) of this Disclosure Statement, “The Offer—Exchange Procedure. You will remain the owner of any TELINT Shares not tendered in connection with the Offer.

 

Y. Can I withdraw any TELINT Shares previously tendered and, if so, until when?

Yes. Any shareholder who may have accepted the Offer will have the right to withdraw his/her acceptance at any time prior to the Expiration Date, including as a result of any relevant change in the terms of the Offer. For additional information thereon, see Section 5(n) of this Disclosure Statement, “The Offer—Withdrawal Rights.”

 

Z. How can I withdraw any TELINT Shares previously tendered?

To withdraw any TELINT Shares previously tendered, you will be required to give written notice of such withdrawal to your Custodian prior to 4:00 p.m., Mexico City time, on the Expiration Date.

 

AA. Is the consummation of the Offer subject to any condition?

Yes. The Offer is subject to various conditions, as described in Section 8 of this Disclosure Statement, “Conditions for the Offer.” Such conditions include, among others, the receipt of certain corporate and regulatory approvals, some of which have been heretofore obtained by AMX and/or TELINT. Among other things, the Offer is conditioned upon the successful acquisition by AMX of at least 51% (fifty one percent) of the shares of stock of TELECOM in connection with the TELECOM Offer; provided, that AMX will only invoke such condition upon TELECOM’s shareholders becoming subject to any regulatory or other restriction precluding their participation in the Offer; and provided, further, that the satisfaction of such condition will not be subject to the sole discretion of TELECOM’s shareholders. In addition, the TELECOM Offer is conditioned upon the absence of any legal or other restriction precluding TELINT’s shareholders’ ability to participate in the TELECOM Offer. In the event that the conditions set forth in this Disclosure Statement are not met and/or waived by AMX, the Offer shall have no legal effect whatsoever.

 

BB. Will TELINT remain a public company following the consummation of the Offer?

Assuming that TELINT’s shareholders will elect to tender their shares in connection with the Offer, AMX intends purchase up to 100% (one hundred percent) of the TELINT Shares and may file a petition to cancel the registration of such shares with the RNV and the BMV, subject to the consent of at least 95% (ninety five percent) of TELINT’s shareholders. Contingent upon the outcome of the Offer, and subject to the satisfaction of all the conditions set forth in the applicable laws to ensure the protection of the public’s interests, and the approval of the requisite corporate actions, AMX intends to file with the CNBV a petition to cancel the registration of the TELINT Shares with the RNV and the BMV, so that such shares will no longer trade therein.

In any event, AMX will observe all applicable legal provisions to ensure the protection of the public’s interests and the market generally, as required by the LMV.

AMX cannot determine at this time whether the TELINT Shares will remain registered with the RNV and listed for trading on the BMV, as such determination is contingent upon, among other things, the outcome of the Offer. For additional information, see sections 17 and 19 of this Disclosure Statement, “Maintenance or Cancellation of the Registration” and “Trust for the Acquisition of Shares Subsequent to the Cancellation of the Registration”, respectively.

 

CC. How has the market price of the TELINT Shares performed recently?

On January 12, 2010, the last full trading day prior to the public disclosure of AMX’s intent to conduct the Offer, the closing price of the TELINT Shares on the BMV was Ps.11.21 per Series A share and Ps.11.52 per Series L share.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

On January 12, 2010, the last full trading day prior to the public disclosure of AMX’s intent to conduct the Offer, the closing price of AMX’s Series L shares was Ps.31.80 per share. For additional information, see Section 7 of this Disclosure Statement, “Market Information.”

 

DD. Who can I speak with if I have any question in connection with the Offer?

If you have any question in connection with the Offer, you may contact Mr. Gilberto Pérez Jiménez, at +(5255) 5625-4900, ext. 1547, or your Custodian.

 

EE. Who is the independent expert retained by TELINT’s Audit and Corporate Governance Committee?

In observance of sound corporate governance practices and to provide increased transparency and objectivity, TELINT’s Audit and Corporate Governance Committee resolved to retain Merrill Lynch as independent expert advisor engaged by TELINT’s Board of Directors, to issue an opinion with respect to the exchange ratio and the Purchase Price proposed in connection with the Offer from a financial standpoint, as required by Mexican law. A copy of such opinion is attached to this Disclosure Statement as Exhibit 26(b). Recipients of this Disclosure Statement are advised to review Exhibit 26(b) hereto to fully understand such opinion, including the facts upon which it is based and any qualifications thereto.

In addition, AMX’s Audit and Corporate Governance Committee resolved to retain Credit Suisse as independent expert advisor engaged by AMX’s Board of Directors (for purposes of, and in accordance with, Mexican law), as described further in Section 9 of this Disclosure Statement, “Arrangements Predating the Offer.”

 

FF. Has TELINT’s Board of Directors issued any opinion in connection with the Offer?

As disclosed by TELINT on March 19, 2010, based upon Merrill Lynch’s opinion as independent expert advisor to TELINT’s Board of Directors, and the opinion of TELINT’s Audit and Corporate Governance Committee, both to the effect that the exchange ratio and the Purchase Price offered by AMX in connection with the Offer are justified from a financial standpoint and, accordingly, are fair to TELINT’s shareholders, TELINT’s Board of Directors determined that such financial ratio is reasonable from a financial standpoint.

In addition, all members of TELINT’s Board of Directors holding TELINT Shares, have informed AMX that they and their related parties intend to participate in the Offer in the terms proposed by AMX, assuming that the economic situation and market conditions remain stable. To the best of AMX’s knowledge, TELINT’s Chief Executive Officer, Mr. Oscan Von Hauske, does not hold any TELINT Shares. For additional information, see Section 17 of this Disclosure Statement, “Opinions of the Board of Directors and the Independent Experts.”

 

GG. What will I receive in exchange for my TELINT Shares?

AMX is offering to purchase up to 100% (one hundred percent) of the outstanding shares of stock of TELINT, in exchange for (i) the concurrent subscription, with the proceeds of such transaction, of 0.373 Series L shares of AMX for each TELINT share, or (ii) Ps.11.66 in cash for each TELINT Share.

 

HH. Should I participate in the Offer, or would I be better off holding on to my TELINT Shares?

Each investor must make his/her own decision as to how to his/her TELINT Shares in light of his/her particular situation and publicly available information.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

II. Will AMX create a trust to subsequently purchase any TELINT Shares not acquired in connection with the Offer?

As announced by AMX, subject to the satisfaction of the applicable requirements AMX intends to cancel the registration of the TELINT Shares and the TELECOM Shares with the RNV. Such cancellation is subordinated to the primary purpose of the Offer and the TELECOM Offer, which is for AMX to acquire up to 100% (one hundred percent) of the outstanding shares of TELINT and TELECOM. In other words, in conducting the Offer and the TELECOM Offer, AMX does not primarily seek to obtain the cancellation of the registration of the TELINT Shares and the TELECOM Shares with the RNV, and such cancellation will be a consequence of the acquisition of the TELINT Shares and the TELECOM Shares by AMX and will be subject to the satisfaction of all applicable legal requirements and the receipt of all the requisite corporate approvals.

The above, on the understanding that unless otherwise approved by the CNBV, if the cancellation of the registration of the TELINT Shares is approved by the affirmative vote of the holders of 95% (ninety five percent) of the TELINT Shares, but the other requirements set forth in Article 8 of the General Rules are not satisfied, including the requirement to the effect that the purchase price payable in respect of the remaining TELINT Shares be less than 300,000 UDIs, TELINT would be required to establish a trust to purchase such shares in accordance with the applicable law.

The creation of the Trust (as such term is defined in this Disclosure Statement) referred to in Article 108(I)(c) of the LMV and Section 19 of this Disclosure Statement, “Trust for the Acquisition of Shares Subsequent to the Cancellation of the Registration”, and the transfer thereto of a number of Series L shares of AMX sufficient to exchange any TELINT Shares not purchased by AMX in connection with the Offer, is contingent upon, among other things, the outcome of the Offer. Accordingly, AMX cannot guarantee that such a trust will be established. For additional information, see sections 17 and 19 of this Disclosure Statement, “Maintenance or Cancellation of Registration” and “Trust for the Acquisition of Shares Subsequent to the Cancellation of the Registration”, respectively.

 

JJ. If a trust is established, would the exchange ratio remain the same as in the Offer?

Yes. If the Trust is established, AMX will transfer thereto a number of Series L shares sufficient to acquire the TELINT shares, based upon the same exchange ratio used in connection with the Offer, which is 0.373 Series L shares of AMX or Ps.11.66 for each TELINT share.

 

KK. What consequences will I suffer if I forget or decide not to participate in the Offer, or if my Custodian does not transfer my TELINT Shares to the Global Account prior to the Expiration Date?

You will retain your TELINT Shares. The market for the TELINT Shares not tendered in connection with the Offer may be less liquid than the market for such shares prior to the Offer, and the market value of such shares could be significantly lower than their value prior to the Expiration Date, particularly if the TELECOM Shares are effectively cancelled with the RNV and delisted from the BMV.

 

LL. What are the tax implications of the sale of my TELINT Shares in connection with the Offer?

The sale of the TELINT shares to AMX and the concurrent subscription of the Series L shares of stock of AMX, are subject to the provisions contained in Articles 60, 109(XXVI) and 190 of Mexico’s Income Tax Law and other applicable tax laws. The summary tax considerations included in this Disclosure Statement does not purport to contain a complete or detailed description of the Mexican tax provisions applicable to TELINT’s shareholders. In addition, such summary may not be applicable to certain shareholders in light of their particular circumstances. For additional information, see Section 20 of this Disclosure Statement, “Tax Considerations.”

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

TELINT’s shareholders are advised to consult with their own independent tax experts as to the tax consequences associated with their participation in the Offer, including those arising as a result of their particular circumstances.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

2. NAME AND ADDRESS OF AMX AND THE ISSUER

AMX’s legal name is América Móvil, S.A.B. de C.V., a limited liability, variable capital public corporation (sociedad anónima bursátil de capital variable) organized under the laws of Mexico, whose principal offices are located at Lago Alberto 366, Edificio Telcel I, Colonia Anáhuac, Delegación Miguel Hidalgo, 11320 México, D.F., Mexico. AMX’s telephone number at such location is +(5255) 2581-4719.

As a publicly traded corporation whose shares are registered with the RNV, AMX’s information is available for consultation by the public through the BMV, at www.bmv.com.mx, as well as through AMX’s own Internet page, www.americamovil.com. AMX’s trading symbol on the BMV is “AMX”.

In addition, as an issuer whose securities are registered with the SEC, since November 2002 AMX has electronically filed information that is available for consultation by the public at the SEC’s Internet page, www.sec.gov.

For additional information concerning AMX, see AMX’s Annual Report, AMX’s Quarterly Report and AMX’s Additional Reports, which are available for consultation at the Internet pages of AMX and the BMV, and the Other Reports, which contain the audited consolidated financial statements of TELINT and TELMEX as of and for the year ended December 31, 2009, together with any recent developments and a detailed analysis and discussion of their respective financial condition, pending their annual reports for 2009. See also Exhibit 26(k) hereto, which contains AMX’s audited consolidated financial statements as of and for the year ended December 31, 2009.

The legal name of the Issuer is TELMEX Internacional, S.A.B. de C.V. According to TELINT’s Annual Report, the Issuer was organized on December 26, 2007, as a result of a spin-off through which TELMEX divested itself of its Latin American and yellow-page businesses.

According to TELINT’s Annual Report, the Issuer is a Mexican holding company whose operating subsidiaries in Brazil, Colombia, Argentina, Chile, Peru and Ecuador, are engaged in the provision of a vast array of telecommunications services, including voice, data and video transmission, pay cable and satellite TV, Internet access and integrated telecommunications solutions, as well as print and Internet-based yellow-page directory services in Mexico, the United States, Argentina and Peru.

TELINT is a limited liability, variable capital public corporation (sociedad anónima bursátil de capital variable) organized under the laws of Mexico.

According to TELINT’s Annual Report, as of December 31, 2008, TELINT’s capital structure was as follows:

 

Series

   Number of Shares
Outstanding
   % of Capital
Stock
    % of  Voting
Capital(1)
 

Series L shares, no par value(2)

   9,792,737,747    53.44      0   

Series AA shares, no par value

   8,114,596,082    44.29      95.13   

Series A shares, no par value(3)

   415,705,231    2.27      4.87   

Total

   18,323,039,060    100.00   100.00

 

(1) Except for certain limited matters on which the Series L shares are entitled to vote.
(2) Excludes 13,874,413,114 Series L shares currently held by TELINT as treasury shares.
(3) Excludes 34,551,690 Series A shares currently held by TELINT as treasury shares.

According to TELINT’s recent developments report and audited consolidated financial statements as of December 31, 2009, disclosed by TELINT through its Internet page, www.telmexinternacional.com, and with the reports filed with the BMV on March 23, 2010, as of December 31, 2009, TELINT’s capital stock consisted of 18,015 million fully-paid shares (18,323 million shares in 2008), no par value, representing the fixed portion of such capital stock, including (i) 8,115 million Series AA shares, (ii) 394 million Series A shares (415 in 2008), and (iii) 9,506 million Series L limited-voting shares (9,793 in 2008). See also the Other Reports.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

According to TELINT’s Annual Report, TELINT’s capital is represented by Series A shares, Series AA shares, and Series L shares, no par value. All such shares are fully subscribed and paid-in. The Series AA and Series A shares are full-voting shares. Holders of the Series L shares are entitled to vote only with respect to certain limited matters. All series of shares carry identical rights except for the ownership restrictions imposed by the Series AA shares, which cannot be held by non-Mexican nationals. The Series AA must represent at all times at least 51% of the aggregate number of Series AA and Series A shares, and in accordance with TELINT’s bylaws may only be acquired by Mexican investors.

According to TELINT’s Annual Report, each Series AA and Series A share can be converted into a Series L share at the election of its holder, so long as the Series AA shares represent not less than 20% of the outstanding shares of stock or 51% of the aggregate number of Series AA and Series A shares. As of December 31, 2008, the Series AA shares represented 44.29% of the outstanding shares of stock and 95.13% of the aggregate number of Series AA and Series A shares.

In addition, according to TELINT’s Annual Report, TELINT has American Depositary Shares (ADSs) outstanding. Each ADS represents 20 Series A or 20 Series L shares and are listed for trading on NASDAQ and the NYSE, respectively. TELINT’s Series L shares are also listed for trading on Spain’s Exchange for Latin American Securities (Mercado de Valores Latinoamericanos, or LATIBEX), whose operating currency is the euro.

TELINT’s principal offices are located at Insurgentes Sur 3500, Colonia Peña Pobre, Delegación Tlalpan, 14060 México, D.F., Mexico. TELINT’s telephone number at such location is +(5255) 5223-3200.

For additional information concerning the Issuer, see TELECOM’s Annual Report and TELECOM’s Quarterly Report. Such reports are available for consultation through the BMV at www.bmv.com.mx, and through TELINT’s own Internet page, www.telmexinternacional.com. TELINT’s trading symbol on the BMV is “TELINT.”

Please refer to TELINT’s recent developments report and audited consolidated financial statements as of December 31, 2009, disclosed by TELINT through its Internet page, www.telmexinternacional.com, as filed with the BMV on March 23, 2010. For ease of reference, a copy of such report is attached hereto as Exhibit 26(h).

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

3. INFORMATION CONCERNING AMX

AMX is the largest provider of wireless communications services in Latin America based on subscribers. As of December 31, 2009, AMX had 201 million wireless subscribers in 18 countries, compared to 182.7 million at year-end 2008. Because AMX’s focus is on Latin America and the Caribbean, a substantial majority of its wireless subscribers are prepaid customers. In addition, as of December 31, 2008, AMX had an aggregate of approximately 3.8 million fixed lines in Central America and the Caribbean as of December 31, 2009, making it the largest fixed-line operator in those regions based on the number of subscribers.

AMX’s principal operations are:

 

   

Mexico. Through Telcel, AMX provides mobile telecommunications service in all nine regions in Mexico. As of December 31, 2009, AMX had 59.2 million subscribers in Mexico. AMX is the largest provider of mobile telecommunications services in Mexico

 

   

Brazil. AMX operates in Brazil through its subsidiaries, Claro S.A. and Americel S.A., under the unified brand name “Claro.” With approximately 44.4 million subscribers as of December 31, 2009, AMX is one of the three largest providers of wireless telecommunications services in Brazil based on the number of subscribers. AMX’s network covers the main cities in Brazil, including São Paulo and Rio de Janeiro.

 

   

Southern Cone. AMX provides wireless services in Argentina, Paraguay, Uruguay and Chile, under the “Claro” brand. As of December 31, 2009, AMX 21.8 million subscribers in the Southern Cone.

 

   

Colombia and Panama. Through Comcel, AMX provides wireless services in Colombia. As of December 31, 2009, AMX had 27.7 million wireless subscribers in Colombia and Panama, and was the largest wireless provider in Colombia. In March 2009, AMX began offering wireless services in Panama.

 

   

Andean Region. AMX provides wireless services in Peru under the “Claro” brand and in Ecuador under the “Porta” brand. As of December 31, 2009, AMX had 17.8 million subscribers in the Andean region.

 

   

Central America. AMX provides fixed-line and wireless services in Guatemala, El Salvador, Honduras and Nicaragua, under the “Claro” brand. As of December 31, 2009, AMX’s Central American subsidiaries had 9.7 million wireless subscribers, over 2.3 million fixed-line subscribers, and 0.3 million broadband subscribers in Central America.

 

   

United States. TracFone Wireless Inc. (“TracFone”) is engaged in the sale and distribution of prepaid wireless services and wireless phones throughout the United States, Puerto Rico and the U.S. Virgin Islands. TracFone had approximately 14.4 million subscribers as of December 31, 2009.

 

   

Caribbean. Compañía Dominicana de Teléfonos, C. por A., or “Codetel,” is the largest provider of telecommunication services in the Dominican Republic. Codetel provides fixed-line and broadband services in the Dominican Republic under the “Codetel” brand and wireless services under the “Claro” brand. Codetel had over 4.8 million wireless subscribers, 0.8 million fixed-line subscribers and 0.2 million broadband subscribers as of December 31, 2009. Through its subsidiaries, Telecomunicaciones de Puerto Rico, Inc. is the largest telecommunications service provider in Puerto Rico, with approximately 0.8 million fixed-line subscribers, 0.8 million wireless subscribers and 0.2 million broadband subscribers as of December 31, 2009. Telecomunicaciones de Puerto Rico, Inc. provides fixed-line and broadband services under the “PRT” brand and wireless services under the “Claro” brand. Oceanic Digital Jamaica Limited provides wireless and value added services in Jamaica. As of December 31, 2009, Oceanic Digital Jamaica Limited had 0.4 million wireless subscribers.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

For additional information concerning AMX, see AMX’s Annual Report and the reports and other information released by AMX pursuant to Articles 104, 105 and 106 of the LMV and Article 33 and other related provisions of the General Rules, including AMX’s Quarterly Report, all of which are available for consultation through the Mexican Stock Exchange at www.bmv.com.mx, and through AMX at www.americamovil.com.

See also AMX’s Additional Reports, which are available for consultation at www.americamovil.com. For ease of reference, copies of such reports are attached hereto as Exhibits 26(f) and 26(g).

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

4. RELATIONSHIP BETWEEN AMX AND THE ISSUER

AMX was organized in September 2000, as a result of a spin-off of TELMEX.

According to TELINT’s Annual Report, the Issuer was also organized as a result of a spin-off of TELMEX on December 26, 2007.

In the normal course of business, AMX enters into a number of contractual relationships with TELMEX, TELINT and their respective subsidiaries, including some foreign subsidiaries.

According to the beneficial ownership reports filed with the SEC, TELINT and AMX may for certain purposes be deemed to have certain common directors.

According to TELINT’s Annual Report, through its subsidiaries in Brazil, Colombia, Argentina, Chile, Peru and Ecuador, TELINT provides a wide range of telecommunications services, including voice, data and video transmission, Internet access and integrated telecommunications solutions; pay cable and satellite television; and print and Internet-based yellow pages directories in Mexico, the United States, Argentina and Peru.

For additional information regarding TELINT’s services, see Section 4, “The Company”, of TELINT’s Annual Report. For additional information regarding AMX’s business and principal shareholders, see sections 4 and 7, “The Company” and “Principal Shareholders and Related Party Transactions”, respectively, of AMX’s Annual Report.

Given that AMX and TELINT provide telecommunication services in some of the same regions, they maintain close business relations with each other. These relations include network interconnections, facility sharing arrangements, private circuit usage, the provision of long-distance services to AMX’s subscribers, and the provision of various services to AMX. These relations are governed by a vast number and array of contracts, the most important of which relate to AMX’s operating subsidiaries in Brazil and EMBRATEL (a TELINT subsidiary engaged in the provision of fixed-line telephony services). Many of these contracts are also subject to telecommunications industry-specific laws. The terms of these contracts are similar to those governing each such company’s relations with unrelated third parties. All these relations are of material significance to AMX’s financial performance.

For additional information concerning AMX’s and TELINT’s operations, see Section 7—Principal Shareholders and Related Party Transactions, of AMX’s Annual Report.

As of the date hereof, AMX does not have any equity interest in TELINT.

Mr. Rayford Wilkins, Jr. serves as a director for both of AMX and TELINT.

AMX and TELINT have not entered into any agreement or arrangement in connection with the Offer. However, on January 13, 2010, AMX informed TELINT’s Board of Directors of its decision to commence the procedure towards the completion of the Offer and requested TELINT’s authorization in connection therewith pursuant to Article Twelve of TELINT’s bylaws.

In addition, on January 14, 2010, the secretary of TELINT’s Board of Directors informed AMX that all of TELINT’s directors had acknowledge receipt of AMX’s notice of its decision to commence the procedure towards the completion of the Offer and had resolved to authorize the Offer in accordance with Article Twelve of TELINT’s bylaws. For additional information regarding the actions taken in anticipation of the Offer, see Section 9 of this Disclosure Statement, “Arrangements Predating the Offer.”

AMX believes that none of TELECOM’s shareholders will fall within the criteria set forth in Article 98 of the LMV concerning tender offers.

For additional information regarding TELECOM and TELMEX, see Exhibits 26(h) and 26(i) of this Disclosure Statement.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

5. THE OFFER

a. Summary

The Purchase Offer

 

Buyer:

América Móvil, S.A.B. de C.V.

 

Shares to be purchased:

Up to 18,011,851,560 shares, representing 100% (one hundred percent) of TELINT’s capital stock as of the date hereof, which are the subject matter of the Offer.

 

% of the capital stock:

Up to 100% (one hundred percent) of the shares of stock of TELINT; provided, that if the condition set forth in Article 89(I) of the General Corporations Law is not satisfied, then an affiliate or subsidiary of AMX will purchase one (1) TELINT Share. The percentage of AMX’s capital to be subscribed in connection with the Offer is approximately 8.2% (eight point two percent) of the 32,108,530,456 shares outstanding as of the date hereof.

 

Exchange ratio:

0.373 AMX Shares for each TELINT Share.

 

Purchase price:

Ps.11.66 per TELINT Share.

 

Trading symbol:

TELINT.

 

Offering Period:

April [], 2010, through May [], 2010.

The Subscription Offer

 

Issuer:

América Móvil, S.A.B. de C.V.

 

Shares to be subscribed:

Up to 2,638,509,332 Series L shares of stock of AMX, based upon an exchange ratio of 0.373 Series L shares of AMX for each TELINT Share, excluding the shares held directly and indirectly by TELECOM.

 

% of the capital stock:

The percentage of AMX’s capital to be subscribed in connection with the Offer is approximately 8.2% (eight point two percent).

 

Subscription factor:

0.373 AMX Shares for each TELINT Share.

 

Aggregate amount:

Depending on the number of shares acquired, subject to a maximum of 2,638,509,332 AMX Shares, based upon an exchange ratio of 0.373 Series L shares of AMX, or approximately Ps.82.5 billion.

 

Offering Period:

April [], 2010, through May [], 2010.

 

Trading symbol:

AMX.

 

Prospective buyers:

Mexican and non-Mexican individuals or entities.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

b. Number and Characteristics of the Shares to be Purchased

Up to 100% (one hundred percent) of the shares of stock of TELINT.

c. Percentage of the Issuer’s Capital Represented by the Shares Included in the Offer

Up to 100% (one hundred percent) of the outstanding shares of stock of TELINT. As of the date hereof, TELINT’s capital was represented by 18,011,851,560 shares.

The percentage of AMX’s capital to be subscribed in connection with the Offer is approximately 8.2% (eight point two percent) of the 32,108,530,456 shares outstanding as of the date hereof.

d. Number of Shares and Over-allotment Options

Up to 100% (one hundred percent) of TELINT’s outstanding capital, which as of the date hereof is represented by 18,011,851,560 shares; provided, that if the condition set forth in Article 89(I) of the General Corporations Law is not satisfied, then a subsidiary of AMX will purchase one (1) TELINT Share. The percentage of AMX’s capital to be subscribed in connection with the Offer is approximately 8.2% (eight point two percent) of the 32m108,530,456 shares outstanding as of the date hereof. The Offer does not include an over-allotment option.

e. Purchase Price and Basis for the Determination Thereof

Basis for Determination

The purchase price was determined based upon market prices. AMX is offering to purchase up to 100% (one hundred percent) of the outstanding shares of TELINT, provided that each TELINT shareholder may elect to receive (i) AMX Shares, or (ii) the Purchase Price in cash.

Those TELINT’s shareholders who may decide to participate in the offer may elect to receive (i) 0.373 AMX Shares in exchange for each TELINT Share, it being understood that the AMX Shares are not subject and shall not be deemed subject to the Offer but shall be deemed to constitute an integral element of the Offer, or (ii) the Purchase Price, or Ps.11.66 in cash per TELINT Share.

The financial terms for the Offer were determined based upon the average closing price of the AMX Shares, the Series L TELINT Shares and the Series L TELMEX Shares (the “TMX Shares”) during the 10 (ten) trading-day period immediately preceding AMX’s announcement of its intent to commence the procedure towards the completion of the Offer, which period ended January 12, 2010 (the “Valuation Period”). The price per share so determined is referred to herein the “Average Price for the Valuation Period.”

In particular, in the Offer (1) the price per share is equal to the Average Price for the Valuation Period of each Series L TELINT Share, and (2) the value of the shares to be subscribed is equal to the Average Price for the Valuation Period of each Series L TELINT Share, divided by the Average Price for the Valuation Period of each AMX Share.

The price of the TELECOM Shares for purposes of the TELECOM Offer was determined based upon the market value of TELECOM’s primary assets, which consist of the TMX Shares and the TELINT Shares, and its net debt, which as of December 31, 2009, amounted to approximately 22 billion Pesos.

The above was determined based upon market prices. AMX determined the exchange ratio in connection with the Offer based upon the average of the closing prices of the AMX Shares and the Series L TELINT Shares during the 10 trading-day period immediately preceding AMX’s announcement of its intent to conduct the Offers, which period ended January 12, 2010. The determination as of January 12, 2010, took into consideration the following:

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

   

Average price per TELINT Share/average price per AMX Share = exchange ratio

 

   

Average price per TELINT Share = Purchase Price

 

   

Approximate prices as of January 12, 2010:

 

   

Average price per TELINT Share during the 10 trading day period preceding the announcement of the Offer = Ps.11.66

 

   

Average price per AMX Share = Ps.31.25800 during the previous 10-trading day period

 

   

Exchange ratio = 0.373

 

   

Purchase Price = Ps.11.66

Premium

There is no premium payable on either the purchase price of the TELINT Shares or the subscription price of the AMX Shares in connection with the Offer. Payment of any such premium would be in violation of the applicable Mexican laws. In addition, the price/net income ratio represented by the Purchase Price for the TELINT Shares is higher than the price/net income of the AMX Shares.

AMX represents under penalty of perjury that it will not make any payment other than the consideration described in this Disclosure Statement, and that it has not undertaken any commitment or affirmative or negative covenant pursuant to Article 100 of the LMV, for the benefit of either the Issuer or the holders of the securities it intends to purchase in connection with the Offer.

Cancellation of Registration

Subject to the satisfaction of the applicable legal requirements, AMX intends to cancel the registration of the TELINT Shares and the TELECOM Shares with the RNV. See Section 17 “Maintenance or Cancellation of the Registration.”

Pursuant to the procedure set forth to such effect in Article 108(I)(b) of the LMV, the reference price for purposes of the cancellation of the registration will be the highest of the weighted average price per share during the 30 trading-day period immediately preceding the Offer, and the book value per TELECOM Share or TELINT Share, as the case may be.

Although Mexican law does not permit price distinctions among the different series of stock of an issuer, AMX has only taken into consideration the price of the Series L shares of each of TELMEX and TELINT, with the exclusion of any other series of stock thereof, because the Series L shares of each of TELMEX and TELINT are the most liquid among all the series of stock thereof. In addition, TELINT’s Series AA shares are not publicly traded, and its Series A shares account for less than 2% of the aggregate number of shares outstanding, are traded infrequently, and have limited or no liquidity as with respect to its Series L shares. As a matter of fact, the BMV’s Price and Quotations Index includes only the Series L shares and not the shares of any other series of stock.

The exchange ratio for purposes of the Offer and the TELECOM Offer has been determined by AMX based upon the above methodology and not pursuant to Article 108(I)(b) of the LMV, considering:

 

   

The Public Interest: The basis for the determination of the exchange ratio in the Offer and the TELECOM Offer fully ensures the protection of the public’s interest;

 

   

Liquidity Factors: the exchange ratio is justified by the fact that it takes into consideration the price of the more liquid Series L shares of each of TELMEX and TELINT;

 

   

Corporate Approvals: The exchange ratio has been approved by the boards of directors of AMX, TELINT and TELECOM. The Purchase Price was approved by the boards of directors of TELINT

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

 

and TELECOM based upon a recommendation issued by their respective audit and corporate governance committees in reliance upon an independent expert opinion as to the fairness of the Purchase Price from a financial standpoint;

 

   

Confirmation: The Purchase Price of Ps.11.66 will be ratified by TELINT’s Board of Directors and Audit and Corporate Governance Committee, and by TELINT’s shareholders upon approval of the cancellation of the registration of the TELINT Shares subject to its authorization by the CNBV;

 

   

Improvement Over the Statutory Ratio: The exchange ratio, as determined by AMX taking into consideration the date of announcement of its intention to commence the Offer, is higher than the product obtained from the application of the methodology set forth in the LMV. The two benchmarks referred to in Article 108 of the LMV, i.e., the book value per share according to the financial statements published prior to the Offer, and the average trading price prior to the announcement of the Offer by AMX’s Board of Directors, are both lower than the exchange ratio. In addition, the Purchase Price has been approved as described in “Corporate Approvals” above;

 

   

Uncertainty: The commencement of the exclusion offer, as the case may be, is uncertain. See Section 17 of this Disclosure Statement, “Maintenance or Cancellation of the Registration”.

As described above, subject to the satisfaction of the applicable requirements AMX intends to cancel the registration of the TELINT Shares and the TELECOM Shares with the RNV. Such cancellation is subordinated to the primary purpose of the Offer and the TELECOM Offer, which is for AMX to acquire up to 100% (one hundred percent) of the outstanding shares of TELINT and TELECOM. In other words, in conducting the Offer and the TELECOM Offer, AMX does not primarily seek to obtain the cancellation of the registration of the TELINT Shares and the TELECOM Shares with the RNV, and such cancellation will be a consequence of the acquisition of the TELINT Shares and the TELECOM Shares by AMX and will be subject to the satisfaction of all applicable legal requirements and the receipt of all the requisite corporate approvals.

The above, on the understanding that unless otherwise approved by the CNBV, if the cancellation of the registration of the TELINT Shares is approved by the affirmative vote of the holders of 95% (ninety five percent) of the TELINT Shares, but the other requirements set forth in Article 8 of the General Rules are not satisfied, including the requirement to the effect that the purchase price payable in respect of the remaining TELINT Shares be less than 300,000 UDIs, TELINT would be required to establish a trust to purchase such shares in accordance with the applicable law.

f. Aggregate Amount of the Offer

It will depend upon the number of purchased shares and up to 2,638,509,332 Series “L” shares, representing AMX capital stock which are currently held as treasury shares, assuming TELECOM will not participate in the Offer, as it has announced, and the remaining TELINT shareholders elect to receive AMX ‘s Series “L” shares; and up to approximately Ps.82.5 billion, assuming TELECOM will not participate in the Offer, as it has announced, and the remaining TELINT shareholders elect to receive cash.

g. Recent Price/Book Value Multiples

2.19x the TELINT’s book value per share, or its majority stockholders’ equity as of December 31, 2009.

h. Recent Price/Net Income Multiples

23.07x the Issuer’s majority net income according to its income statement as of December 31, 2009.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

i. Market Multiples

The offering price is equal to 1.02x the closing price of Ps.11.40 per TELINT Share on the BMV on January 13, 2010.

 

j. AMX Multiples

 

Multiples Prior to the Offer

   AMX

Price/profit multiple

   13.10

Price/book value

   6.59

Price/EBITDA

   5.45

AMX’s multiples following the Offer will be included in the disclosure statement to be filed with the CNBV upon completion of the Offer.

 

k. Offering Period

The Offering Period will be 20 (twenty) days beginning as of the Commencement Date, unless extended pursuant to Section 5(k)(iii) of this Disclosure Statement, “The Offer—Exchange Procedure—Extension of the Offering Period.

 

l. Exchange Procedure

 

  (1) Any TELINT shareholder who may wish to participate in the Offer and who may be holding his/her TELECOM shares through a Custodian with an account at Indeval must, within the Offering Period give to such Custodian written notice of his/her decision to accept the Offer and instruct such Custodian to sell his/her TELINT shares and his/her election to either (i) allocate, concurrently, the proceeds of such sale to subscribe the Series L shares of AMX, or (ii) receive the Purchase Price, for each TELINT share tendered by them. The Custodians will consolidate all the instructions received from their clients and deliver to Inbursa a duly completed Acceptance Letter identifying the TELINT Shares being tendered by each of them, in the manner prescribed in the following paragraph. All Acceptance Letters must be duly completed, signed and delivered via courier, return receipt requested, to Inbursa’s offices located at Paseo de las Palmas 736, Colonia Lomas de Chapultepec, Delegación Miguel Hidalgo, 11000 Mexico D.F., Att.: Mr. Gilberto Pérez Jiménez, telephone +(5255) 5625-4900 ext. 1547, fax +(5255) 5259-2167. Business hours for purposes of such delivery shall be from 9:00 a.m. to 2:00 p.m., and from 4:00 p.m. to 6:00 p.m., Mexico City time during all business days of the Offering Period, except for the Expiration Date, in which business hours shall be from 9:00 a.m. to 4:00 pm., Mexico City time.

 

  (2) Custodians must transfer all relevant TELINT Shares to account No. 2501, maintained by Inbursa at Indeval, not later than by 4:00 p.m. (Mexico City time) on May [], 2010. Any shares transferred or delivered to such account after such time shall be excluded from the Offer.

 

  (3) Any TELINT shareholder who may be holding his/her TELINT shares in the form of physical certificates must make arrangements with the Custodian of his/her choice for purposes of participating in the Offer, or surrender his/her duly endorsed stock certificates at Inbursa’s offices located at Paseo de las Palmas 736, Colonia Lomas de Chapultepec, Delegación Miguel Hidalgo, 11000 Mexico D.F., Att.: Mr. Gilberto Pérez Jiménez, during the hours set forth in the paragraph 1 above and not later than by 11:00 a.m. (Mexico City time) on May [], 2010.

 

  (4) On May [], 2010, Inbursa will transfer to each Custodian’s account at Indeval, (i) the number of AMX Series L shares issued in exchange for the TELINT shares received from or transferred by them as set forth hereinabove, or (ii) the Purchase Price.

 

  (5) The acceptance of the Offer as evidenced by the transfer of any TELINT shares to account No. 2501 at Indeval as described above, shall for all applicable purposes become irrevocable as of May [], 2010. As a result, no such shares may be withdrawn from such account subsequent to their transfer thereto.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

In order to participate in the Offer, the holders of the TELINT Series AA shares will be required to first convert such shares into TELINT Series L shares, unless on the Expiration Date the BMV shall allow for the trading and exchange of shares at the reference price determined for purposes of the Offer.

 

  (i) Transfer Period and Acceptance Letter Delivery Period

April [], 2010, through 4:00 p.m. on May [], 2010.

 

  (ii) Conditions for the Acceptance of the Shares

 

  (1) Any TELINT shareholder who may wish to participate in the Offer and who may be holding his/her TELECOM shares through a Custodian with an account at Indeval must, within the Offering Period give to such Custodian written notice of his/her decision to accept the Offer and instruct such Custodian to sell his/her TELINT shares and his/her election to either (i) allocate, concurrently, the proceeds of such sale to subscribe the Series L shares of AMX, or (ii) receive the Purchase Price, for each TELINT share tendered by them. The Custodians will consolidate all the instructions received from their clients and deliver to Inbursa a duly completed Acceptance Letter identifying the TELINT Shares being tendered by each of them, in the manner prescribed in the following paragraph. All Acceptance Letters must be duly completed, signed and delivered via courier, return receipt requested, to Inbursa’s offices located at Paseo de las Palmas 736, Colonia Lomas de Chapultepec, Delegación Miguel Hidalgo, 11000 Mexico D.F., Att.: Mr. Gilberto Pérez Jiménez, telephone +(5255) 5625-4900 ext. 1547, fax +(5255) 5259-2167. Business hours for purposes of such delivery shall be from 9:00 a.m. to 2:00 p.m., and from 4:00 p.m. to 6:00 p.m., Mexico City time during all business days of the Offering Period, except for the Expiration Date of the Offer, in which business hours will be from 9:00 a.m. to 4:00 p.m., Mexico City time.

 

  (2) Custodians must transfer all relevant TELINT Shares to account No. 2501, maintained by Inbursa at Indeval, not later than by 4:00 p.m. (Mexico City time) on May [], 2010. Any shares transferred or delivered to such account after such time shall be excluded from the Offer.

 

  (3) Any TELINT shareholder who may be holding his/her TELINT shares in the form of physical certificates must make arrangements with the Custodian of his/her choice for purposes of participating in the Offer, or surrender his/her duly endorsed stock certificates at Inbursa’s offices located at Paseo de las Palmas 736, Colonia Lomas de Chapultepec, Delegación Miguel Hidalgo, 11000 Mexico D.F., Att.: Mr. Gilberto Pérez Jiménez, during the hours set forth in the paragraph 1 above and not later than by 11:00 a.m. (Mexico City time) on May [], 2010.

 

  (4) On May [], 2010, Inbursa will transfer to each Custodian’s account at Indeval, (i) the number of AMX Series L shares issued in exchange for the TELINT shares received from or transferred by them as set forth hereinabove, or (ii) the Purchase Price.

 

  (5) The acceptance of the Offer as evidenced by the transfer of any TELINT shares to account No. 2501 at Indeval as described above, shall for all applicable purposes become irrevocable as of May [], 2010 after 4:00 p.m., Mexico City time. As a result, no such shares may be withdrawn from such account subsequent to their transfer thereto.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

  (iii) Extension of the Offering Period

Pursuant to the applicable laws, the offering period is subject to extension on one or more occasions at AMX’s sole discretion and/or in the event of any material change in the terms of the Offer; provided, that the period of any extension as a result of any such change shall be not less than five (5) business days. In addition, the Offer may be extended by resolution of the CNBV pursuant to the last paragraph of Article 101 of the LMV.

 

  (iv) Acceptance, Proration and Over-allotment procedure

The acceptance procedure is described in the section hereof relating to the conditions for the acceptance of securities. Because the Offer is for 100% (one hundred percent) of TELINT’s shares, there are no prorating or over-allotment procedures in place.

 

m. Settlement Date

The settlement will occur three (3) business days following the date of registration with the BMV; provided that, subject to the successful completion of both the Offer and the TELINT Offer, AMX intends to settle both transactions concurrently in Mexico and the United States.

 

n. Summary Resolutions of the Board of Directors of AMX in Connection with the Commencement of the Offer

On January 13, 2010, all members of the Board of Directors of AMX, with the exception of Messrs. Patrick Slim Domit and Daniel Hajj Aboumrad, who abstained from voting thereon but accepted the outcome of the voting proceedings, adopted, among others, the following resolutions:

“…It is hereby resolved to commence the procedures towards the potential completion of two voluntary, simultaneous and conditional public purchase and concurrent subscription offers, the first such offer for up to all of the shares of stock of Carso Global Telecom, S.A.B. de C.V., and the second such offer for up to all of the outstanding shares of stock of TELMEX Internacional, S.A.B. de C.V. not presently held by Carso Global Telecom, S.A.B. de C.V., and to approve Mr. García Moreno’s proposal to retain a recognized investment banking institution as independent expert advisor for purposes of the issuance of an opinion as to the fairness of the proposed exchange ratio for the purchase and concurrent subscription of shares in connection with the aforementioned offers. The above, in order to provide the shareholders of the aforementioned entities with additional elements based upon which to make a decision with respect to such offers.

It is hereby acknowledged that the aforementioned public offers will be subject to various conditions customary for these types of transactions, and to certain special conditions given the nature of such transactions. Among other things, both offers will be conditioned upon the receipt of all the requisite governmental, corporate and third-party approvals, and to their concurrent closing and settlement. In addition, the voluntary purchase of the shares of stock of TELMEX Internacional, S.A.B. de C.V. will be conditioned upon the successful acquisition of not less than 51% of the shares of stock of Carso Global Telecom, S.A.B. de C.V. The aforementioned transactions will be structured as efficiently as practicable, taking into consideration, among other things, various corporate, tax and regulatory considerations.

…It is hereby resolved to authorize the secretary of the Board of Directors to call one or more shareholders’ meetings to approve all the necessary procedures and amendments to the bylaws so as to implement the exchange and/or conversion of shares entailed by the offers described in the immediately preceding resolution, and to publish any and all necessary notices to such effect. The above, on the understanding that such shareholders meetings will consider, among other things, the confirmation of the transactions hereby approved, and any necessary amendments to the bylaws, including, among others, the amendment of the Company’s nationality clause.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

...It is hereby resolved to authorize the Company, through its officers and/or legal representatives and/or the secretary of the Board of Directors, to give notice of its intent to purchase the aforementioned shares through a public purchase and concurrent subscription offer, in the terms set forth herein, to the shareholders and/or boards of directors of Carso Global Telecom, S.A.B. de C.V. and TELMEX Internacional, S.A.B. de C.V., respectively.

...It is hereby resolved to authorize Messrs. Daniel Hajj Aboumrad, Carlos José García Moreno and Alejandro Cantú Jiménez, to exercise the authority heretofore granted to them by the Company, to execute all the agreements, contracts and other documents pertaining to the transactions hereby approved, and to carry out any such acts and give to any domestic and/or foreign authorities any such notices as they may deem necessary or appropriate for purposes of the transactions hereby approved. It is further resolved to authorize the Company, through its officers and/or legal representatives, to commence such procedures as they may deem necessary or appropriate for the consummation of the public purchase offers hereby approved, including, among other things, to prepare such information memorandums and other documents and information required pursuant to the Securities Market Law and the General Provisions Applicable to Issuers and Other Participants in the Securities Market.

...It is expressly resolved to ratify each and all acts heretofore carried out by the aforementioned legal representatives in connection with the matters approved pursuant to the preceding resolutions.

...It is expressly resolved that the Company will hold each of the principal and alternate members of its Board of Directors, its Chief Executive Officer, Secretary and Alternate Secretary, each of its executive officers, employees and legal representatives, and each of the delegates appointed pursuant to the foregoing resolutions, free and harmless from any claim by or liability to any person or authority as a result of the performance and enforcement of the resolutions contained hereinabove. The Company expressly assumes any and all liabilities arising as a result of any claim or action of any nature whatsoever, and to reimburse each such person for any and all of the expenses incurred thereby in connection therewith, including attorneys’ fees and other expenses.”

o. Withdrawal Rights

Any shareholder who may have accepted the Offer will have the right to withdraw his/her acceptance at any time prior to 4:00 p.m., Mexico City time on the Expiration Date (without being subject to any penalty), including as a result of any material change in the terms of the Offer or the existence of a competing offer (i) providing for the payment of a cash and/or in-kind consideration to the holders of the TELINT Shares, higher than the consideration contemplated by the Offer, and (ii) which is reasonably determined by TELINT’s Board of Directors, acting in good faith after due consideration of the terms and conditions thereof, to provide for better conditions than the Offer. To implement such withdrawal, the relevant Custodian shall give the Underwriter, prior to the Expiration Date, written notice of the exercise of the Withdrawal Right by such shareholder. The relevant acceptance will be deemed withdrawn upon receipt of such notice by the Underwriter. Notices of exercise of the Withdrawal Rights are not subject to revocation and, accordingly, the shares so withdrawn will not be included in the Offer.

Notwithstanding the above, any TELINT shares so withdrawn may be subsequently retendered in connection with the Offer at any time prior to the Expiration Date, subject to the satisfaction of the conditions set forth in Section 5(k) (ii) of this Disclosure Statement, “The Offer—Exchange Procedure—Conditions for the Acceptance of the Shares.”

Any question as to the form and validity (including the time of receipt) of any withdrawal notice will be decided by AMX through the Underwriter, and such decision will be final and binding. AMX may waive any right, defect or irregularity in connection with the withdrawal of any acceptance by any TELINT shareholder, depending upon its significance.

There is no penalty for the transfer of any TELINT Shares in connection with a competing offer, or for the exercise of the Withdrawal Rights afforded to TELINT’s shareholders hereunder. Any TELINT shareholder may exercise his/her Withdrawal Right in the manner prescribed in this Disclosure Statement.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

6. UNDERWRITER

The Underwriter is Inversora Bursátil, S.A. de C.V. Casa de Bolsa, Grupo Financiero Inbursa.

 

7. MARKET INFORMATION

The Issuer is a limited liability, variable capital public corporation (sociedad anónima bursátil de capital variable) whose shares are listed for trading on the BMV under the trading symbol “TELINT.” In addition, TELIN’s Series A and Series L ADSs are traded in the New York Stock Exchange (NYSE) under the trading symbols “TII.A” and “TII”, and its Series L shares are traded in the Mercado de Valores Latinoamericanos en Euros (“LATIBEX”) of Madrid, Spain.

On January 12, 2010, the date of announcement of the commencement of the procedure towards the completion of the Offer, the closing price of the TELINT Shares on the BMV was Ps.11.21 per Series A share and Ps.11.52 per Series L share.

The following table shows the high and low trading prices of the TELINT Shares during each quarter in 2008 and 2009:

 

     BMV*
     High    Low
     (Ps. per TELINT Series L Share)

Financial Quarter

     

2008:

  

1Q

   Ps.            Ps.        

2Q

   9.14    8.39

3Q

   8.07    6.19

4Q

   8.14    5.48

2009:

     

1Q

   Ps. 8.45    Ps.5.19

2Q

   8.73    6.74

3Q

   9.77    7.82

4Q

   11.96    8.52

 

(*) TELINT shares were first listed on June 10, 2008.

Source: Bloomberg.

 

     BMV*
     High    Low
     (Ps. per TELINT Series A Share)

Financial Quarter

     

2008:

  

1Q

   Ps.            Ps.        

2Q

   9.21    8.00

3Q

   8.60    6.40

4Q

   7.80    6.00

2009:

     

1Q

   Ps. 8.00    Ps. 5.26

2Q

   8.25    6.25

3Q

   9.60    7.75

4Q

   11.85    8.70

 

(*) TELINT shares were first listed on June 10, 2008.

Source: Bloomberg.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

The following table shows the high and low trading prices of the TELINT ADSs in the NYSE during each quarter in 2008 and 2009:

 

     NYSE*
     High    Low
     (US$ per TELINT Series A ADS)

Financial Quarter

     

2008:

  

1Q

   $      $  

2Q

     17.75      16.02

3Q

     15.41      11.01

4Q

     13.25      7.90

2009:

     

1Q

   $ 12.27    $ 6.41

2Q

     12.90      8.51

3Q

     14.60      11.3

4Q

     18.52      13.00

 

(*) TELINT shares were first listed on June 10, 2008.

Source: Bloomberg.

 

     NYSE*
     High    Low
     (US$ per TELINT Series L ADS)

Financial Quarter

     

2008:

  

1Q

   $      $  

2Q

     17.68      16.1

3Q

     15.37      11.21

4Q

     13.41      7.78

2009:

     

1Q

   $ 12.67    $ 6.68

2Q

     13.04      9.68

3Q

     14.71      12.53

4Q

     8.83      12.9

 

(*) TELINT’s ADS were first listed on the NYSE on June 10, 2008.

Source: Bloomberg.

AMX is a limited liability, variable capital public corporation (sociedad anónima bursátil de capital variable) whose shares are listed for trading on the BMV under the trading symbol “AMX.”

On January 13, 2010, the date of announcement of the commencement of the procedure towards the completion of the Offer, the closing price of the Series L AMX Shares on the BMV was Ps.31.79 per share.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

The following table shows the high and low trading prices of the Series L AMX Shares during each quarter in 2008 and 2009:

 

     BMV
     High    Low

Financial Quarter

     

2008:

  

1Q

   Ps.33.80    Ps.26.23

2Q

   34.52    26.46

3Q

   26.82    23.07

4Q

   25.13    16.03

2009:

     

1Q

   Ps.22.53    Ps.18.02

2Q

   25.36    19.20

3Q

   30.65    24.55

4Q

   31.47    28.66

 

Source: Bloomberg.

The market information derived from Bloomberg, contained in this Section, has not been reviewed by the CNBV.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

8. CONDITIONS FOR THE OFFER

The Offer is conditioned upon the receipt of various corporate and legal approvals, consents and or implicit authorizations. As a result, the Offer is conditioned upon the satisfaction of the conditions described below, or the waiver of such conditions by AMX. AMX may in its sole discretion, at any time prior to the Expiration Date or, in the event of any condition consisting in the receipt and continuing validity and effect of any regulatory approval, the Settlement Date,

 

  (1) rescind and terminate the Offer, and immediately return to TELINT’s shareholders any TELINT Shares tendered thereby, without any consideration in exchange therefor, and/or

 

  (2) modify the terms and conditions of the Offer,

if AMX determines in good faith and in its sole discretion, for purposes of either (1) or (2) above, that any of the following conditions has occurred:

 

   

Adverse Governmental Action: The commencement of an Adverse Governmental Action.

 

   

Consents: AMX’s or TELINT’s failure to obtain from any public, governmental, judicial, legislative or regulatory authority, of from any individual or entity, any waiver, consent or approval necessary to consummate the Offer and the other transactions envisioned by AMX, or to enable any shareholder to participate in the Offer or the other transactions envisioned by AMX, or if the terms and conditions of any such waiver, consent or approval are not acceptable to AMX in its reasonable discretion.

 

   

Adverse Changes in the Issuer’s Condition: Any change or potential change (or any condition, event or circumstance that could be expected to result in a change) in the business activities, properties, assets, liabilities, obligations, capitalization, equity interests, financial or other condition, operations, licenses, concessions, permits, permit applications, operating results, cash flows or prospects of TELINT or any of its subsidiaries and affiliates, which in AMX’s discretion has had or could be expected to have a material adverse effect on TELINT or any of its subsidiaries or affiliates, or if AMX has acquired knowledge of any fact which in its sole discretion has had or could be expected to have a material adverse effect on the value of TELINT or any of its subsidiaries, or the TELINT Shares.

 

   

Adverse Changes in the Market Conditions: An actual or threatened (i) suspension of trading in or the imposition of any restriction on the trading price of any securities on any stock exchange, secondary or over-the-counter market, or any decrease in the Dow Jones Industrial Average, the Standard & Poor’s Index of 500 Industrial Companies, Mexico’s National Consumer Price Index or the Mexico Index, in excess of 10%, since the closing of business on the last trading day prior to the Commencement Date, or material adverse change in the price of the securities listed on the BMV or the NYSE, (ii) declaration of default or banking moratorium by the local or federal authorities of Mexico or the United States, whether or not mandatory, (iii) event or restriction (whether or not mandatory) imposed by any authority, entity or agency, which in AMX’s discretion could affect the availability of credit or financing from the banking system, (iv) commencement or escalation of any war, hostilities, threats, terrorist acts or other national or international crisis directly or indirectly affecting Mexico or the United States, (v) material change in the exchange rate of the Mexican peso in the United States, or in any other exchange rate, or any suspension or restriction in the relevant foreign exchange, financial or securities markets (whether or not mandatory), or (vi) if any such act or event is ongoing as of the Commencement Date, any escalation or deterioration in any such act or event.

 

   

The lack of satisfaction or waiver of the conditions for the TELECOM Offer or that AMX’s failure to acquired there through at least 51% (fifty one percent) of TELECOM’s shares of stock; provided, that AMX will only invoke such condition upon TELECOM’s shareholders becoming subject to any regulatory or other restriction precluding their participation in the Offer; and provided, further, that the satisfaction of such condition will not be subject to the sole discretion of TELECOM’s shareholders.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

The occurrence of any of the events upon which the Offer is conditioned will be determined by AMX in its sole and reasonable discretion. Such conditions have been established for AMX’s exclusive benefit and may be invoked, exercised or decided upon by AMX regardless of the circumstances giving rise thereto. Such conditions may be waived by AMX (to the extent permitted by law) in whole or in part, from time to time, at AMX’s sole discretion. AMX failure to exercise any such right will not be construed as a waiver thereof. No waiver of any such right in respect of any particular event or circumstance will constitute or be deemed to constitute a waiver with respect of any other particular fact or circumstance. Each such right shall constitute a continuing right that may be exercised or invoked at any time and from time to time. Any determination by AMX based upon any of the events described in this Section 8 of this Disclosure Statement, “Conditions for the Offer,” shall be final and binding upon all parties.

AMX reserves the right to rescind and terminate the Offer upon the verification of any of the aforementioned conditions. In such event, AMX will publicly announce such event or waive the relevant condition. Upon termination of the Offer, those TELINT shareholders who may have tendered their shares will not have any right or claim against AMX as a result of such termination. The foregoing right may be exercised by AMX at any time prior to its acceptance of any TELINT Shares tendered in connection with the Offer.

Following the commencement of the Offering Period, the Offer will not be subject to any condition other than those described in this section. The receipt by the Underwriter of any TELINT Shares validly tendered in connection with the Offer shall not be construed as a waiver of any of the aforementioned conditions by AMX.

No waiver by AMX of its right to rescind and terminate the Offer at any time upon the occurrence of any of the conditions described herein shall constitute or be deemed to constitute a permanent waiver of AMX’s right to invoke such condition at any future time.

On the first business day after the Expiration Date, AMX, taking into consideration the satisfaction or absence of the conditions described in this section, will disclose to the public, through a press release, whether or not it intends to accept the TELINT Shares tendered in connection with the Offer and, as the case may be, the aggregate number of shares so tendered and accepted. Any such announcement shall constitute an acknowledgment on the part of AMX to the effect that the Offer has been consummated and that AMX will proceed to settle the Offer in the terms and in accordance with the procedure described herein. Any such announcement will also be released through EMISNET.

For purposes of the conditions referred to in this Section 8 of this Disclosure Statement, “Conditions for the Offer,” (i) on February 11, 2010, the Federal Competition Commission resolved by a majority of votes to unconditionally approve the foregoing transaction, and (ii) the Offer was approved by AMX’s shareholders meeting on March 17, 2010.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

9. ARRANGEMENTS PREDATING THE OFFER

a. Preliminary Discussions and Analysis

In November 2009, the chief executive officers of AMX and TELINT, Messrs. Daniel Hajj and Oscar Von Hauske, respectively, began discussing a potential arrangement for the joint provision of telecommunications services to their customers in Brazil in order to match the offerings available from their competitors in the integrated fixed-line and wireless telephony sector. Subsequent discussions between Messrs. Hajj and Von Hauske expanded to include other potential synergies or business opportunities, not only in Brazil but in some of the other countries in which both companies operate.

The preliminary discussions led to a series of meetings in late December 2009. Such meetings were held as part of the ongoing quest for business opportunities to maximize the use of the 3G technology developed by AMX in the region, and to provide converging services based upon the technologies implemented by both AMX and TELINT. These meetings in turn led to a more comprehensive approach towards the integration of services, including through the potential merger or overall reorganization of some of their operating companies in the region, including those in Brazil and Colombia.

In early January 2010, Mr. Daniel Hajj began discussing with the Slim Family and other TELECOM’s directors the possibility of combining the operations of AMX, TELECOM and TELINT, in lieu of a more limited merger or combination of some of AMX’s and TELINT’s operating subsidiaries. These discussions led to the conclusion that such a combination would provide the shareholders of both companies not only with an integrated service but also with significant long-term synergies among AMX’s and TELINT’s business operations, licenses, infrastructure and managements in various Latin American countries. They developed a proposal pursuant to which AMX would offer shares of its capital stock as consideration in connection with any such transaction, based upon an exchange ratio that would take into consideration the relative market prices of each of AMX’s and TELINT’s Series L shares, given their high market liquidity. As with respect to TELECOM, they discussed the possibility of using the market price of the Series L shares of each of AMX, TELINT and TELMEX, and TELECOM’s net debt.

Following the aforementioned discussions, in early January 2010, Messrs. Hajj and Von Hauske, together with certain members of the Slim Family and TELECOM directors, concluded that the proposed combination should be analyzed from a corporate and regulatory standpoint in order to submit a formal proposal for its consideration by AMX’s Board of Directors. Such conclusion was based, among other things, on (i) the fact that the evolution in the telecommunications industry has led to the existence of concurrent technological platforms for voice, data and video streaming services, (ii) the recent development in terms of applications, functionalities and equipment, (iii) the increased demand for services in Latin America, (iv) the advantages derived from offering integrated communication services in the region, regardless of the platform of origin of such services, and (v) the opportunity to create long-term synergies.

Over the weekend of January 9 and 10, 2010, Mr. Hajj contacted several of AMX’s executive officers, principal shareholders and outside counsel, and the Slim Family, to discuss the viability and potential structure of such a business combination. He also contacted certain representatives of AT&T, which is one of TELINT’s and AMX’s principal shareholders, to inform such shareholder of AMX’s plans in connection with the proposed transaction. Over the same weekend, the General Counsel and Secretary of the Board of Directors of AMX, Mr. Alejandro Cantú Jiménez, and the company’s outside counsel, discussed and devised a preliminary structure for the proposed combination. On January 11, 2010, a working group comprised by various executive offices and advisors informed Mr. Hajj that the preferred structure for such combination would be a concurrent purchase and subscription offer targeted towards TELECOM’s and TELINT’s shareholders, given that any merger or other alternatives to achieve such combination would under Mexican law give rise to adverse tax consequences and involve cumbersome regulatory approval processes in Mexico and the rest of Latin America.

Over the course of the following week, AMX’s Executive Director of Administration and Finance, Mr. Carlos García Moreno, and Mr. Cantú, held numerous telephone conferences and meetings with AMX’s

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

outside counsel and tax advisors, and with its financial advisor, Grupo Financiero Inbursa, S.A.B. de C.V. They further met and held several discussions with various representatives of AT&T, Inc., regarding the proposed combination.

The meeting of the Board of Directors took place as scheduled, on January 13. In attendance thereat were Messrs. García Moreno, Cantú Jiménez, as well as various representatives of Grupo Financiero Inbursa, S.A.B. de C.V., its financial advisor. Mr. Hajj submitted the proposed combination to the Board of Directors for its approval, which moved to authorize the company’s executive officers to initiate the processes leading to the possible completion of proceed with the transaction in the proposed terms. The Board of Directors’ decision was unanimous, except that Messrs. Hajj and Patrick Slim Domit abstained from voting thereon to avoid any appearance of a conflict of interests, but were nevertheless in agreement with the resolution adopted by the remaining directors.

Immediately after the board meeting, AMX issued a notice of disclosure of the occurrence of a relevant event and announced its intention to conduct the Offer and the TELINT Offer. On the same date, AMX delivered a letter to each member of TELECOM’s and TELINT’s boards, requesting their authorization for AMX to commence the process towards the consummation of the Offer and the TELINT Offer, as required by Article Twelve of TELINT’s bylaws and Article Thirteen of TELECOM’s bylaws. Such letters contained all the additional information required to be disclosed to any person interested in the acquisition of 10% (ten percent) or more of the issued and outstanding shares of stock of TELECOM and TELINT, in accordance with their respective bylaws.

b. Approval by AMX’s Board of Directors

As mentioned in subsection (a) above, on January 13, 2010, the members of AMX’s Board of Directors resolved, by unanimous consent, to commence the process towards the consummation of the Offer in the terms set forth below, which terms were disclosed to the public and the Board of Directors of TELECOM:

“América Móvil’s Tender Offer for Carso Global Telecom and TELMEX Internacional

Mexico City, January 13, 2010. América Móvil, S.A.B. de C.V. (América Móvil) [BMV: AMX] [NYSE: AMX] [NASDAQ: AMOV] [LATIBEX: XAMXL] announced today that it will launch an exchange offer to the shareholders of Carso Global Telecom, S.A.B. de C.V. (“Telecom”), pursuant to which, the shares of this entity would be exchanged for shares issued by América Móvil. The exchange ratio will be 2.0474 to 1, and thus, the shareholders of Telecom would receive 2.0474 shares of América Móvil per each Telecom share.

If Telecom’s shareholders tender all their Telecom shares, America Móvil would beneficially own 59.4% of the outstanding shares of Teléfonos de México, S.A.B. de C.V. (“TELMEX”), and 60.7% of the outstanding shares of TELMEX Internacional, S.A.B. de C.V. (“TELMEX Internacional”). Telecom’s net indebtedness at the end of 2009 was approximately 22,017 million pesos.

América Móvil also announced that it will launch an offer for the exchange or purchase of all of the TELMEX Internacional’s shares that are not already owned by Telecom (39.3%). The exchange ratio will be 0.373 shares of America Móvil per each TELMEX Internacional share or, if in cash, the purchase price would be 11.66 pesos per share.

In the event that, at completion of the processes described above, a sufficient number of shares are obtained, it is intended to delist both Telecom and TELMEX Internacional in the various securities markets in which their shares are registered.

These transactions have been approved today by América Móvil’s board of directors.

The evolution of the telecommunications industry has led to the development of technological platforms capable of providing combined voice, data and video transmission services. This

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

circumstance, coupled with the most recent advances in applications, functionalities and equipment, points towards an imminent, exponential growth in the demand for data services in Latin America and the Caribbean. The business combination described herein will enable América Móvil to offer integrated communication services throughout the region, regardless of their platform of origin.

In addition, the business combination will enable América Móvil to create significant synergies, improve its marketing efforts and more efficiently use its networks and information systems and processes, which will in turn enable it to offer more integrated and universal services in increasingly attractive conditions to its customers. América Móvil also believes that the combined businesses will place it in a better position to focus on research and development in the telecommunications and information technology industries. Overall, the business combination will strengthen América Móvil’s position as a world class company with nearly 250 million customers in 18 countries.

As a strong and competitive Mexican corporation, América Móvil will be well positioned to offer to its customers and investors the benefits of the significant technological changes occurring worldwide, which will be of particular relevance in Latin America.

The Offers will be conditioned upon the issuance of the requisite approvals.

About AMX

América Móvil is the leading provider of wireless services in Latin America. As of September 30, 2009, it had 194.3 million cellular and 3.8 million fixed-line subscribers in the American continent.

**********

Limitation of Liability

This document does not constitute an offer to sell any securities in the United States, Mexico, or elsewhere. No securities may be offered or sold in the United States, Mexico or any other jurisdiction, unless registered or exempted from registration therein. Any public offering of securities in the United States or Mexico must be made pursuant to a prospectus or Disclosure Statement available from América Móvil, containing detailed information with respect to América Móvil, Carso Global Telecom, S.A.B. de C.V. and/or TELMEX Internacional, S.A.B. de C.V., and their respective managements, financial information and other relevant data.

This document contains forward-looking statements, which reflect the current views or future expectations of América Móvil and its management with respect to its performance, business operations and future developments. We use words such as “believe,” “anticipate,” “plan,” “expect,” “intend,” “target,” “estimate,” “project,” “predict,” “forecast,” “guideline,” “should” and other similar expressions to identify forward-looking statements, but they are not the only way we identify such statements. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. América Móvil does not undertake and expressly disclaims any obligation to update such statements in light of new information, future developments, or otherwise.”

c. Receipt of Notice and Approval by TELECOM’s Board of Directors

As mentioned in subsection (a) above, on January 13, 2010, América Móvil informed TELECOM’s board of directors of its intention to commence the process towards the completion of the Offer, and requested that it authorize the necessary actions for purposes of Article Thirteen of TELECOM’s bylaws.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

On January 14, 2010, TELECOM issued a public release with respect to the events described in the following excerpt thereof:

“Mexico City, Federal District, January 14, 2010; Carso Global Telecom, S.A.B. de C.V. (BMV: “TELECOM”), hereby announces that it has received notice of the intent of América Móvil, S.A.B de C.V. (BMV and NYSE: “AMX”; NASDAQ: “AMOV”) to conduct an exchange offer in respect of up to all of the registered shares of common stock of TELECOM, which notice is reproduced below:

‘AMÉRICA MÓVIL’S TENDER OFFER FOR CARSO GLOBAL TELECOM AND TELMEX INTERNACIONAL

MEXICO CITY, JANUARY 13, 2010. AMÉRICA MÓVIL, S.A.B. DE C.V. (AMÉRICA MÓVIL) [BMV: AMX] [NYSE: AMX] [NASDAQ: AMOV] [LATIBEX: XAMXL] ANNOUNCED TODAY THAT IT WILL LAUNCH AN EXCHANGE OFFER TO THE SHAREHOLDERS OF CARSO GLOBAL TELECOM, S.A.B. DE C.V. (“TELECOM”), PURSUANT TO WHICH, THE SHARES OF THIS ENTITY WOULD BE EXCHANGED FOR SHARES ISSUED BY AMÉRICA MÓVIL. THE EXCHANGE RATIO WILL BE 2.0474 TO 1, AND THUS, THE SHAREHOLDERS OF TELECOM WOULD RECEIVE 2.0474 SHARES OF AMÉRICA MOVIL PER EACH TELECOM SHARE.

IF TELECOM’S SHAREHOLDERS TENDER ALL THEIR TELECOM SHARES, AMERICA MOVIL WOULD BENEFICIALLY OWN 59.4% OF THE OUTSTANDING SHARES OF TELÉFONOS DE MÉXICO, S.A.B. DE C.V. (“TELMEX”), AND 60.7% OF THE OUTSTANDING SHARES OF TELMEX INTERNACIONAL, S.A.B. DE C.V. (“TELMEX INTERNACIONAL”). TELECOM’S NET INDEBTEDNESS AT THE END OF 2009 WAS APPROXIMATELY 22,017 MILLION PESOS.

AMÉRICA MOVIL ALSO ANNOUNCED THAT IT WILL LAUNCH AN OFFER FOR THE EXCHANGE OR PURCHASE OF ALL OF THE TELMEX INTERNACIONAL’S SHARES THAT ARE NOT ALREADY OWNED BY TELECOM (39.3%). THE EXCHANGE RATIO WILL BE 0.373 SHARES OF AMERICA MOVIL PER EACH TELMEX INTERNACIONAL SHARE OR, IF IN CASH, THE PURCHASE PRICE WOULD BE 11.66 PESOS PER SHARE.

IN THE EVENT THAT, AT COMPLETION OF THE PROCESSES DESCRIBED ABOVE, A SUFFICIENT NUMBER OF SHARES ARE OBTAINED, IT IS INTENDED TO DELIST BOTH TELECOM AND TELMEX INTERNACIONAL IN THE VARIOUS SECURITIES MARKETS IN WHICH THEIR SHARES ARE REGISTERED.

THESE TRANSACTIONS HAVE BEEN APPROVED TODAY BY AMÉRICA MÓVIL’S BOARD OF DIRECTORS.

THE EVOLUTION OF THE TELECOMMUNICATIONS INDUSTRY HAS LED TO THE DEVELOPMENT OF TECHNOLOGICAL PLATFORMS CAPABLE OF PROVIDING COMBINED VOICE, DATA AND VIDEO TRANSMISSION SERVICES. THIS CIRCUMSTANCE, COUPLED WITH THE MOST RECENT ADVANCES IN APPLICATIONS, FUNCTIONALITIES AND EQUIPMENT, POINTS TOWARDS AN IMMINENT, EXPONENTIAL GROWTH IN THE DEMAND FOR DATA SERVICES IN LATIN AMERICA AND THE CARIBBEAN. THE BUSINESS COMBINATION DESCRIBED HEREIN WILL ENABLE AMÉRICA MÓVIL TO OFFER INTEGRATED COMMUNICATION SERVICES THROUGHOUT THE REGION, REGARDLESS OF THEIR PLATFORM OF ORIGIN. IN ADDITION, THE BUSINESS COMBINATION WILL ENABLE AMÉRICA MÓVIL TO CREATE SIGNIFICANT SYNERGIES, IMPROVE ITS MARKETING EFFORTS AND MORE EFFICIENTLY USE ITS NETWORKS AND INFORMATION SYSTEMS AND PROCESSES, WHICH WILL IN TURN ENABLE IT TO OFFER MORE INTEGRATED AND UNIVERSAL SERVICES IN INCREASINGLY ATTRACTIVE CONDITIONS TO ITS CUSTOMERS. AMÉRICA MÓVIL ALSO BELIEVES THAT THE COMBINED BUSINESSES WILL PLACE IT IN A BETTER POSITION TO FOCUS ON RESEARCH AND DEVELOPMENT IN THE TELECOMMUNICATIONS AND INFORMATION TECHNOLOGY INDUSTRIES. OVERALL, THE BUSINESS COMBINATION WILL STRENGTHEN AMÉRICA

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

MÓVIL’S POSITION AS A WORLD CLASS COMPANY WITH NEARLY 250 MILLION CUSTOMERS IN 18 COUNTRIES.

AS A STRONG AND COMPETITIVE MEXICAN CORPORATION, AMÉRICA MÓVIL WILL BE WELL POSITIONED TO OFFER TO ITS CUSTOMERS AND INVESTORS THE BENEFITS OF THE SIGNIFICANT TECHNOLOGICAL CHANGES OCCURRING WORLDWIDE, WHICH WILL BE OF PARTICULAR RELEVANCE IN LATIN AMERICA.

THE OFFERS WILL BE CONDITIONED UPON THE ISSUANCE OF THE REQUISITE APPROVALS.

ABOUT AMX

AMÉRICA MÓVIL IS THE LEADING PROVIDER OF WIRELESS SERVICES IN LATIN AMERICA. AS OF SEPTEMBER 30, 2009, IT HAD 194.3 MILLION CELLULAR AND 3.8 MILLION FIXED-LINE SUBSCRIBERS IN THE AMERICAN CONTINENT.

*****

LIMITATION OF LIABILITY

THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER TO SELL ANY SECURITIES IN THE UNITED STATES, MEXICO, OR ELSEWHERE. NO SECURITIES MAY BE OFFERED OR SOLD IN THE UNITED STATES, MEXICO OR ANY OTHER JURISDICTION, UNLESS REGISTERED OR EXEMPTED FROM REGISTRATION THEREIN. ANY PUBLIC OFFERING OF SECURITIES IN THE UNITED STATES OR MEXICO MUST BE MADE PURSUANT TO A PROSPECTUS OR DISCLOSURE STATEMENT AVAILABLE FROM AMÉRICA MÓVIL, CONTAINING DETAILED INFORMATION WITH RESPECT TO AMÉRICA MÓVIL, CARSO GLOBAL TELECOM, S.A.B. DE C.V. AND/OR TELMEX INTERNACIONAL, S.A.B. DE C.V., AND THEIR RESPECTIVE MANAGEMENTS, FINANCIAL INFORMATION AND OTHER RELEVANT DATA.

THIS DOCUMENT CONTAINS FORWARD-LOOKING STATEMENTS, WHICH REFLECT THE CURRENT VIEWS OR FUTURE EXPECTATIONS OF AMÉRICA MÓVIL AND ITS MANAGEMENT WITH RESPECT TO ITS PERFORMANCE, BUSINESS OPERATIONS AND FUTURE DEVELOPMENTS. WE USE WORDS SUCH AS “BELIEVE,” “ANTICIPATE,” “PLAN,” “EXPECT,” “INTEND,” “TARGET,” “ESTIMATE,” “PROJECT,” “PREDICT,” “FORECAST,” “GUIDELINE,” “SHOULD” AND OTHER SIMILAR EXPRESSIONS TO IDENTIFY FORWARD-LOOKING STATEMENTS, BUT THEY ARE NOT THE ONLY WAY WE IDENTIFY SUCH STATEMENTS. FORWARD-LOOKING STATEMENTS INVOLVE INHERENT RISKS AND UNCERTAINTIES. WE CAUTION YOU THAT A NUMBER OF IMPORTANT FACTORS COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE PLANS, OBJECTIVES, EXPECTATIONS, ESTIMATES AND INTENTIONS EXPRESSED IN SUCH FORWARD-LOOKING STATEMENTS. AMÉRICA MÓVIL DOES NOT UNDERTAKE AND EXPRESSLY DISCLAIMS ANY OBLIGATION TO UPDATE SUCH STATEMENTS IN LIGHT OF NEW INFORMATION, FUTURE DEVELOPMENTS, OR OTHERWISE.

*****

ABOUT AMX

AMÉRICA MÓVIL IS THE LEADING PROVIDER OF WIRELESS SERVICES IN LATIN AMERICA. AS OF SEPTEMBER 30, 2009, IT HAD 194.3 MILLION CELLULAR AND 3.8 MILLION FIXED-LINE SUBSCRIBERS IN THE AMERICAN CONTINENT.

*****

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

LIMITATION OF LIABILITY

THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER TO SELL ANY SECURITIES IN THE UNITED STATES, MEXICO, OR ELSEWHERE. NO SECURITIES MAY BE OFFERED OR SOLD IN THE UNITED STATES, MEXICO OR ANY OTHER JURISDICTION, UNLESS REGISTERED OR EXEMPTED FROM REGISTRATION THEREIN. ANY PUBLIC OFFERING OF SECURITIES IN THE UNITED STATES OR MEXICO MUST BE MADE PURSUANT TO A PROSPECTUS OR DISCLOSURE STATEMENT AVAILABLE FROM AMX, CONTAINING DETAILED INFORMATION WITH RESPECT TO AMX AND ITS MANAGEMENT, FINANCIAL INFORMATION AND OTHER RELEVANT DATA.

THIS DOCUMENT CONTAINS FORWARD-LOOKING STATEMENTS, WHICH REFLECT THE CURRENT VIEWS OR FUTURE EXPECTATIONS OF AMX AND ITS MANAGEMENT WITH RESPECT TO ITS PERFORMANCE, BUSINESS OPERATIONS AND FUTURE DEVELOPMENTS. WE USE WORDS SUCH AS “BELIEVE,” “ANTICIPATE,” “PLAN,” “EXPECT,” “INTEND,” “TARGET,” “ESTIMATE,” “PROJECT,” “PREDICT,” “FORECAST,” “GUIDELINE,” “SHOULD” AND OTHER SIMILAR EXPRESSIONS TO IDENTIFY FORWARD-LOOKING STATEMENTS, BUT THEY ARE NOT THE ONLY WAY WE IDENTIFY SUCH STATEMENTS. FORWARD-LOOKING STATEMENTS INVOLVE INHERENT RISKS AND UNCERTAINTIES. WE CAUTION YOU THAT A NUMBER OF IMPORTANT FACTORS COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE PLANS, OBJECTIVES, EXPECTATIONS, ESTIMATES AND INTENTIONS EXPRESSED IN SUCH FORWARD-LOOKING STATEMENTS. AMX DOES NOT UNDERTAKE AND EXPRESSLY DISCLAIMS ANY OBLIGATION TO UPDATE SUCH STATEMENTS IN LIGHT OF NEW INFORMATION, FUTURE DEVELOPMENTS, OR OTHERWISE.’

**********

THE SHARES SUBJECT MATTER OF THE EXCHANGE OFFER WILL REPRESENT UP TO 100% OF THE CAPITAL STOCK OF TELECOM. THE OFFER IS CONDITIONED UPON THE RECEIPT OF ALL THE REQUISITE APPROVALS, INCLUDING THE APPROVAL OF THE NATIONAL BANKING AND SECURITIES COMMISSION.

TELECOM’S BOARD OF DIRECTORS EXPRESSED ITS INTEREST IN THE PROPOSAL AND RESOLVED TO AUTHORIZE ITS AUDIT AND CORPORATE GOVERNANCE COMMITTEE TO TAKE ALL THE ACTIONS MANDATED BY THE APPLICABLE LAWS, INCLUDING THE PREPARATION OF THE RELEVANT OPINIONS AND THE APPOINTMENT OF EXPERTS AND ADVISORS TO ANALYZE SUCH PROPOSAL, SO AS TO FACILITATE THE SUCCESSFUL COMPLETION OF THE OFFER.

BASED UPON ARTICLE THIRTEEN OF TELECOM’S BYLAWS, THE BOARD OF DIRECTORS OF TELECOM AUTHORIZED AMÉRICA MÓVIL TO LAUNCH THE PROPOSED OFFER.

*****

THIS NOTICE DOES NOT CONSTITUTE AN OFFER IN RESPECT OF ANY TYPE OF SHARES. NO SECURITIES MAY BE PUBLICLY OFFERED UNTIL AFTER THE RELEVANT OFFER HAS BEEN APPROVED BY THE NATIONAL BANKING AND SECURITIES COMMISSION IN ACCORDANCE WITH THE SECURITIES MARKET LAW.

LIMITATION OF LIABILITY: THIS DOCUMENT MAY CONTAIN FORWARD-LOOKING STATEMENTS, WHICH REFLECT OUR CURRENT VIEWS OR FUTURE EXPECTATIONS WITH RESPECT TO OUR PERFORMANCE, BUSINESS OPERATIONS AND FUTURE DEVELOPMENTS. SUCH FORECASTS INCLUDE, WITHOUT LIMITATION, CERTAIN STATEMENTS THAT MAY PREDICT, INDICATE OR IMPLY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS, AND

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

MAY CONTAIN WORDS SUCH AS “BELIEVE,” “ANTICIPATE,” “EXPECT,” “IN OUR OPINION,” “MAY RESULT,” AND OTHER WORDS OF SIMILAR IMPORT. FORWARD-LOOKING STATEMENTS INVOLVE INHERENT RISKS AND UNCERTAINTIES. WE CAUTION YOU THAT A NUMBER OF IMPORTANT FACTORS COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE PLANS, OBJECTIVES, EXPECTATIONS, ESTIMATES AND INTENTIONS EXPRESSED HEREIN. NEITHER WE NOR OUR SUBSIDIARIES, AFFILIATES, DIRECTORS, EXECUTIVE OFICERS, AGENTS OR EMPLOYEES ASSUME ANY RESPONSIBILITY WHATSOEVER TO ANY THIRD PARTY (INCLUDING ANY INVESTOR) FOR ANY INVESTMENT, DECISION OR ACTION TAKEN IN CONNECTION WITH THE OFFER CONTAINED IN THIS DOCUMENT OR FOR ANY CONSEQUENTIAL, SPECIAL OR OTHER SIMILAR DAMAGES SUFFEREDTHEREBY.”

d. Receipt of Notice and Approval by TELINT’s Board of Directors

As mentioned in subsection (a) above, on January 13, 2010, América Móvil informed TELINT’s board of directors of its intention to commence the process towards the completion of the TELINT Offer, and requested that it authorize the necessary actions for purposes of Article Twelve of TELINT’s bylaws.

On January 14, 2010, TELINT issued a public release with respect to the events described in the following excerpt thereof:

“Mexico City, Federal District, January 14, 2010; TELMEX Internacional, S.A.B. de C.V. (BMV: “TELINT”, NYSE: “TII”, LATIBEX: “XTII”), hereby announces that it has received notice of the intent of América Móvil, S.A.B de C.V. (BMV and NYSE: “AMX”; NASDAQ: “AMOV”) to conduct an exchange offer in respect of up to all of the registered shares of common stock of TELINT other than those owned by Carso Global Telecom, S.A.B. de C.V., which notice is reproduced below:

‘AMÉRICA MÓVIL’S TENDER OFFER FOR CARSO GLOBAL TELECOM AND TELMEX INTERNACIONAL

MEXICO CITY, JANUARY 13, 2010. AMÉRICA MÓVIL, S.A.B. DE C.V. (AMÉRICA MÓVIL) [BMV: AMX] [NYSE: AMX] [NASDAQ: AMOV] [LATIBEX: XAMXL] ANNOUNCED TODAY THAT IT WILL LAUNCH AN EXCHANGE OFFER TO THE SHAREHOLDERS OF CARSO GLOBAL TELECOM, S.A.B. DE C.V. (“TELECOM”), PURSUANT TO WHICH, THE SHARES OF THIS ENTITY WOULD BE EXCHANGED FOR SHARES ISSUED BY AMÉRICA MÓVIL. THE EXCHANGE RATIO WILL BE 2.0474 TO 1, AND THUS, THE SHAREHOLDERS OF TELECOM WOULD RECEIVE 2.0474 SHARES OF AMÉRICA MOVIL PER EACH TELECOM SHARE.

IF TELECOM’S SHAREHOLDERS TENDER ALL THEIR TELECOM SHARES, AMERICA MOVIL WOULD BENEFICIALLY OWN 59.4% OF THE OUTSTANDING SHARES OF TELÉFONOS DE MÉXICO, S.A.B. DE C.V. (“TELMEX”), AND 60.7% OF THE OUTSTANDING SHARES OF TELMEX INTERNACIONAL, S.A.B. DE C.V. (“TELMEX INTERNACIONAL”). TELECOM’S NET INDEBTEDNESS AT THE END OF 2009 WAS APPROXIMATELY 22,017 MILLION PESOS.

AMÉRICA MOVIL ALSO ANNOUNCED THAT IT WILL LAUNCH AN OFFER FOR THE EXCHANGE OR PURCHASE OF ALL OF THE TELMEX INTERNACIONAL’S SHARES THAT ARE NOT ALREADY OWNED BY TELECOM (39.3%). THE EXCHANGE RATIO WILL BE 0.373 SHARES OF AMERICA MOVIL PER EACH TELMEX INTERNACIONAL SHARE OR, IF IN CASH, THE PURCHASE PRICE WOULD BE 11.66 PESOS PER SHARE.

IN THE EVENT THAT, AT COMPLETION OF THE PROCESSES DESCRIBED ABOVE, A SUFFICIENT NUMBER OF SHARES ARE OBTAINED, IT IS INTENDED TO DELIST BOTH TELECOM AND TELMEX INTERNACIONAL IN THE VARIOUS SECURITIES MARKETS IN WHICH THEIR SHARES ARE REGISTERED.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

THESE TRANSACTIONS HAVE BEEN APPROVED TODAY BY AMÉRICA MÓVIL’S BOARD OF DIRECTORS.

THE EVOLUTION OF THE TELECOMMUNICATIONS INDUSTRY HAS LED TO THE DEVELOPMENT OF TECHNOLOGICAL PLATFORMS CAPABLE OF PROVIDING COMBINED VOICE, DATA AND VIDEO TRANSMISSION SERVICES. THIS CIRCUMSTANCE, COUPLED WITH THE MOST RECENT ADVANCES IN APPLICATIONS, FUNCTIONALITIES AND EQUIPMENT, POINTS TOWARDS AN IMMINENT, EXPONENTIAL GROWTH IN THE DEMAND FOR DATA SERVICES IN LATIN AMERICA AND THE CARIBBEAN. THE BUSINESS COMBINATION DESCRIBED HEREIN WILL ENABLE AMÉRICA MÓVIL TO OFFER INTEGRATED COMMUNICATION SERVICES THROUGHOUT THE REGION, REGARDLESS OF THEIR PLATFORM OF ORIGIN.

IN ADDITION, THE BUSINESS COMBINATION WILL ENABLE AMÉRICA MÓVIL TO CREATE SIGNIFICANT SYNERGIES, IMPROVE ITS MARKETING EFFORTS AND MORE EFFICIENTLY USE ITS NETWORKS AND INFORMATION SYSTEMS AND PROCESSES, WHICH WILL IN TURN ENABLE IT TO OFFER MORE INTEGRATED AND UNIVERSAL SERVICES IN INCREASINGLY ATTRACTIVE CONDITIONS TO ITS CUSTOMERS. AMÉRICA MÓVIL ALSO BELIEVES THAT THE COMBINED BUSINESSES WILL PLACE IT IN A BETTER POSITION TO FOCUS ON RESEARCH AND DEVELOPMENT IN THE TELECOMMUNICATIONS AND INFORMATION TECHNOLOGY INDUSTRIES. OVERALL, THE BUSINESS COMBINATION WILL STRENGTHEN AMÉRICA MÓVIL’S POSITION AS A WORLD CLASS COMPANY WITH NEARLY 250 MILLION CUSTOMERS IN 18 COUNTRIES.

AS A STRONG AND COMPETITIVE MEXICAN CORPORATION, AMÉRICA MÓVIL WILL BE WELL POSITIONED TO OFFER TO ITS CUSTOMERS AND INVESTORS THE BENEFITS OF THE SIGNIFICANT TECHNOLOGICAL CHANGES OCCURRING WORLDWIDE, WHICH WILL BE OF PARTICULAR RELEVANCE IN LATIN AMERICA.

THE OFFERS WILL BE CONDITIONED UPON THE ISSUANCE OF THE REQUISITE APPROVALS.

ABOUT AMX

AMÉRICA MÓVIL IS THE LEADING PROVIDER OF WIRELESS SERVICES IN LATIN AMERICA. AS OF SEPTEMBER 30, 2009, IT HAD 194.3 MILLION CELLULAR AND 3.8 MILLION FIXED-LINE SUBSCRIBERS IN THE AMERICAN CONTINENT.

*****

LIMITATION OF LIABILITY

THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER TO SELL ANY SECURITIES IN THE UNITED STATES, MEXICO, OR ELSEWHERE. NO SECURITIES MAY BE OFFERED OR SOLD IN THE UNITED STATES, MEXICO OR ANY OTHER JURISDICTION, UNLESS REGISTERED OR EXEMPTED FROM REGISTRATION THEREIN. ANY PUBLIC OFFERING OF SECURITIES IN THE UNITED STATES OR MEXICO MUST BE MADE PURSUANT TO A PROSPECTUS OR DISCLOSURE STATEMENT AVAILABLE FROM AMÉRICA MÓVIL, CONTAINING DETAILED INFORMATION WITH RESPECT TO AMÉRICA MÓVIL, CARSO GLOBAL TELECOM, S.A.B. DE C.V. AND/OR TELMEX INTERNACIONAL, S.A.B. DE C.V., AND THEIR RESPECTIVE MANAGEMENTS, FINANCIAL INFORMATION AND OTHER RELEVANT DATA.

THIS DOCUMENT CONTAINS FORWARD-LOOKING STATEMENTS, WHICH REFLECT THE CURRENT VIEWS OR FUTURE EXPECTATIONS OF AMÉRICA MÓVIL AND ITS MANAGEMENT WITH RESPECT TO ITS PERFORMANCE, BUSINESS OPERATIONS AND FUTURE

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

DEVELOPMENTS. WE USE WORDS SUCH AS “BELIEVE,” “ANTICIPATE,” “PLAN,” “EXPECT,” “INTEND,” “TARGET,” “ESTIMATE,” “PROJECT,” “PREDICT,” “FORECAST,” “GUIDELINE,” “SHOULD” AND OTHER SIMILAR EXPRESSIONS TO IDENTIFY FORWARD-LOOKING STATEMENTS, BUT THEY ARE NOT THE ONLY WAY WE IDENTIFY SUCH STATEMENTS. FORWARD-LOOKING STATEMENTS INVOLVE INHERENT RISKS AND UNCERTAINTIES. WE CAUTION YOU THAT A NUMBER OF IMPORTANT FACTORS COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE PLANS, OBJECTIVES, EXPECTATIONS, ESTIMATES AND INTENTIONS EXPRESSED IN SUCH FORWARD-LOOKING STATEMENTS. AMÉRICA MÓVIL DOES NOT UNDERTAKE AND EXPRESSLY DISCLAIMS ANY OBLIGATION TO UPDATE SUCH STATEMENTS IN LIGHT OF NEW INFORMATION, FUTURE DEVELOPMENTS, OR OTHERWISE.’

**********

THE SHARES SUBJECT MATTER OF THE PURCHASE OR EXCHANGE OFFER WILL REPRESENT UP TO 39.3% OF THE CAPITAL STOCK OF TELINT AND CONSIST OF THE SHARES OF TELINT OTHER THAN THOSE CURRENTLY OWNED BY CARSO GLOBAL TELECOM, S.A.B. DE C.V. THE OFFER IS CONDITIONED UPON THE RECEIPT OF ALL THE REQUISITE APPROVALS, INCLUDING THE APPROVAL OF THE NATIONAL BANKING AND SECURITIES COMMISSION.

TELINT’S BOARD OF DIRECTORS EXPRESSED ITS INTEREST IN THE PROPOSAL AND RESOLVED TO AUTHORIZE ITS AUDIT AND CORPORATE GOVERNANCE COMMITTEE TO TAKE ALL THE ACTIONS MANDATED BY THE APPLICABLE LAWS, INCLUDING THE PREPARATION OF THE RELEVANT OPINIONS AND THE APPOINTMENT OF EXPERTS AND ADVISORS TO ANALYZE SUCH PROPOSAL, SO AS TO FACILITATE THE SUCCESSFUL COMPLETION OF THE OFFER.

BASED UPON ARTICLE TWELVE OF TELINT’S BYLAWS, THE BOARD OF DIRECTORS OF TELINT AUTHORIZED AMÉRICA MÓVIL TO LAUNCH THE PROPOSED OFFER.

******

THIS NOTICE DOES NOT CONSTITUTE AN OFFER IN RESPECT OF ANY TYPE OF SHARES. NO SECURITIES MAY BE PUBLICLY OFFERED UNTIL AFTER THE RELEVANT OFFER HAS BEEN APPROVED BY THE NATIONAL BANKING AND SECURITIES COMMISSION IN ACCORDANCE WITH THE SECURITIES MARKET LAW.

LIMITATION OF LIABILITY: THIS DOCUMENT MAY CONTAIN FORWARD-LOOKING STATEMENTS, WHICH REFLECT OUR CURRENT VIEWS OR FUTURE EXPECTATIONS WITH RESPECT TO OUR PERFORMANCE, BUSINESS OPERATIONS AND FUTURE DEVELOPMENTS. SUCH FORECASTS INCLUDE, WITHOUT LIMITATION, CERTAIN STATEMENTS THAT MAY PREDICT, INDICATE OR IMPLY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS, AND MAY CONTAIN WORDS SUCH AS “BELIEVE,” “ANTICIPATE,” “EXPECT,” “IN OUR OPINION,” “MAY RESULT,” AND OTHER WORDS OF SIMILAR IMPORT. FORWARD-LOOKING STATEMENTS INVOLVE INHERENT RISKS AND UNCERTAINTIES. WE CAUTION YOU THAT A NUMBER OF IMPORTANT FACTORS COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE PLANS, OBJECTIVES, EXPECTATIONS, ESTIMATES AND INTENTIONS EXPRESSED HEREIN. NEITHER WE NOR OUR SUBSIDIARIES, AFFILIATES, DIRECTORS, EXECUTIVE OFICERS, AGENTS OR EMPLOYEES ASSUME ANY RESPONSIBILITY WHATSOEVER TO ANY THIRTY PARTY (INCLUDING ANY INVESTOR) FOR ANY INVESTMENT, DECISION OR ACTION TAKEN IN CONNECTION WITH THE OFFER CONTAINED IN THIS DOCUMENT OR FOR ANY CONSEQUENTIAL, SPECIAL OR OTHER SIMILAR DAMAGES SUFFEREDTHEREBY.”

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

Pursuant to Article 48 of the LMV and Article 130 of the General Corporations Law, Article Twelve of TELINT’s bylaws incorporates protections against the acquisition, directly or indirectly, of a controlling ownership position in TELINT by any shareholder, group of related shareholders acting in concert, or third party. Pursuant to such provisions, any acquisition of TELINT’s shares or other securities the underlying instruments of which are TELINT Shares or any rights thereto, representing 10% (ten percent) or more of TELINT’s voting capital, in a single transaction or a series of successive transactions, is subject to the prior approval of TELINT’s Board of Directors.

Any person or group of persons intending to acquire 10% (ten percent) or more of the outstanding voting shares of TELINT, must request in writing the aforementioned authorization to the Chairman and the Secretary of TELINT’s Board of Directors.

If the Board of Directors declines such request, it must designate one or more buyers, and such buyers will be required to pay to the seller the most recent price reported by the BMV. The price for any shares not registered with the RNV will be determined in accordance with the procedure set forth in Article 130 of the General Corporations Law.

The Board of Directors will issue its decision to that effect within three months from the receipt of the request, or the date of receipt of any additional information requested by it, as the case may be, taking into consideration (i) such criteria as may best conform to the interests, business operations and long term prospects of TELINT and its subsidiaries, (ii) the economic benefits resulting from the observance of Article Twelve of TELINT’s bylaws, which must not be exclusive of any one or more TELINT shareholders other than the person intending to acquire its control, and (iii) not to complete preclude the acquisition of TELINT’s control.

In addition, TELINT’s bylaws provide that for so long as TELINT’s shares are registered with the RNV, any such transaction carried out through the BMV will be subject, in addition, to the provisions contained in the LMV or any resolution issued by the CNBV.

TELINT’s bylaws further provide that in the event of any acquisition required to be made through a tender offer in terms of the LMV, the prospective buyer must (i) satisfy all applicable legal requirements, (ii) obtain all the requisite regulatory approvals, and (iii) secure the Board of Director’s authorization prior to the commencement of the applicable offering period. In any event, any person intending to acquire 10% (ten percent) or more of TELINT’s capital stock must disclose any action taken thereby to secure the authorization of the Board of Directors in accordance with TELINT’s bylaws.

e. Engagement of AMX’s Financial Advisor and Independent Expert for Mexican law purposes

On February 9, 2010, AMX’s Audit and Corporate Governance Committee issued a favorable opinion with respect to the commencement of the Offer by AMX. Likewise, it resolved, among other things, to ratify the appointment of Credit Suisse. Said appointment was approved by AMX’s Board of Directors on January 13, 2010. In connection with the Offer, Credit Suisse was requested (in its capacity as independent expert advisor engaged by AMX’s Board of Directors, in accordance with, and for purposes of, Mexican law) to issue for the information of AMX’s Board of Directors its opinion, from a financial standpoint, as to the financial fairness of the consideration, in cash or in AMX Shares, offered by AMX to TELINT’s shareholders in connection with the Offer.

f. Opinion of AMX’s Financial Advisor and Independent Expert for Mexican law purposes

During the meeting of the Board of Directors of AMX held on March 9, 2010, Credit Suisse issued its opinion to AMX’s Board of Directors, stating that, as of the date thereto and, based upon the facts disclosed therein, and on other considerations included therein, a copy of which is attached hereto as Exhibit 26(a), the consideration in cash or in AMX Shares offered to TELINT’s shareholders is reasonable from a financial standpoint to AMX. The opinion was issued solely for the information of AMX’s Board of Directors for purposes of evaluating the Offer from a financial standpoint and not for the benefit of

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

shareholders and is subject to several presumptions, qualifications, limitations and considerations. The opinion does not deal in any way with other aspects of the Offer, and does not purport to be a recommendation, and shall not be understood as a recommendation to the shareholders in connection with their participation in the Offer or any other matter.

g. Opinion of the Independent Expert Retained by TELINT’s Audit and Corporate Governance

    Committee

As disclosed by TELINT on March 19, 2010, TELINT’s Audit and Corporate Governance Committee confirmed Merrill Lynch’s appointment as independent expert advisor engaged by TELINT’s Board of Directors for purposes of the issuance of an opinion as to the financial fairness of the exchange ratio and the Purchase Price proposed in connection with the Offer. Based upon the facts disclosed thereto, and the other considerations described in its opinion, a copy of which is attached hereto as Exhibit 26(b), Merrill Lynch advised TELINT’s Board of Directors that the exchange ratio and the Purchase Price offered to TELINT’s shareholders are fair from a financial standpoint. Recipients of this Disclosure Statement are advised to review Exhibit 26(b) hereto to fully understand such opinion, including the facts upon which it is based and any qualifications thereto.

h. Approval by TELINT’s Board of Directors

As disclosed by TELINT on March 19, 2010, pursuant to Article 101 of the LMV its Board of Directors, taking into consideration Merrill Lynch’s independent expert opinion and the opinion of TELINT’s Audit and Corporate Governance Committee, both to the effect that the exchange ratio and the Purchase Price offered by AMX in connection with the Offer are justified from a financial standpoint and, accordingly, are fair to TELINT’s shareholders, determined that the exchange ratio and the Purchase Price for purposes of the Offer are fair and reasonable from a financial standpoint.

In addition, pursuant to Article 101 of the LMV, all members of TELINT’s Board of Directors holding TELINT Shares, have informed AMX that they intend to participate in the Offer in the terms proposed by AMX, assuming that the economic situation and market conditions remain stable. TELINT’s Chief Executive Officer, Mr. Oscar Von Hauske, does not hold any TELINT Shares.

Finally, the members of TELINT’s Board of Directors indicated that, notwithstanding the fact that in their opinion they have no conflicts of interests in connection with the Offer, in order to avoid any potential perception as to the existence of any such conflict Messrs. Arturo Elías Ayub and Carlos Slim Domit decided to abstain from participating in any discussion with respect to the Offer, but were nevertheless in agreement with the resolution adopted by the remaining directors.

i. Approval by AMX’s General Ordinary Shareholders Meeting

The Offer was approved by AMX’s general shareholders meeting on March 17, 2010.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

10. INTENT

AMX intends to acquire, directly or indirectly, substantially all of the outstanding shares of the capital stock of TELINT in connection with the Offer, with the aim of combining its wireless telecommunications services and TELINT’s voice, data and video transmission, Internet access and other telecommunications services in Brazil, Colombia and various other Latin American countries. The business combination will translate in a more efficient use of their operating companies’ networks, and will enable AMX to provide more universally integrated services to its customers. AMX believes that the business combination will also enhance its research and development capabilities in the telecommunications and information technology sectors.

For additional information concerning AMX plans and prospects, see Section 11 of this Disclosure Statement, “Purpose and Future Plans.”

As announced by AMX, subject to the satisfaction of the applicable requirements AMX intends to cancel the registration of the TELINT Shares and the TELECOM Shares with the RNV. Such cancellation is subordinated to the primary purpose of the Offer and the TELECOM Offer, which is for AMX to acquire up to 100% (one hundred percent) of the outstanding shares of TELINT and TELECOM. In other words, in conducting the Offer and the TELECOM Offer, AMX does not primarily seek to obtain the cancellation of the registration of the TELINT Shares and the TELECOM Shares with the RNV, and such cancellation will be a consequence of the acquisition of the TELINT Shares and the TELECOM Shares by AMX and will be subject to the satisfaction of all applicable legal requirements and the receipt of all the requisite corporate approvals.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

11. PURPOSE AND FUTURE PLANS

Primary Purpose

The primary purpose of the Offer is for AMX to acquire all of the outstanding shares of stock of TELECOM available in the open market, and for TELECOM’s participating shareholders to subscribe AMX Shares.

Consolidation of Operations and Creation of Synergies between AMX and TELINT

The purpose of the Offer and the TELECOM Offer is for AMX to acquire, directly or indirectly, substantially all of the outstanding shares of stock of TELINT and TELECOM, so as to integrate AMX’s wireless communication services with TELINT’s voice, data and video transmission, Internet access and other telecommunications services in Brazil, Colombia and certain Latin American countries where both AMX and TELINT currently operate. AMX believes that the evolution of the telecommunications industry in the past few years has resulted in the development of integrated technological platforms capable of providing combined voice, data and video transmission services. This circumstance, coupled with the most recent advances in applications, functionalities and equipment, points towards an exponential increase in the demand for data services throughout Latin America. AMX believes that the proposed business combination would enable it to provide integrated communication services to its customers in the two companies’ operating regions, regardless of their platform of origin at any given time.

AMX and TELINT have significant operations in seven countries. AMX provides wireless voice and data services in each such country. The following table contains a description of the services offered by TELINT in each such country:

 

Country

  

TELINT

Brazil

  

National and international long-distance telephony

Internet access

DTH TV

VPN data solutions

Managed voice, data and video transmission

Data Center

Call Center

Satellite TV

Chile

  

National and international long-distance telephony

Internet access

DTH-HFC TV

VPN data solutions

Managed voice, data and video transmission

Data Center

Satellite TV

Argentina

  

National and international long-distance telephony

Internet access

VPN data solutions

Managed voice, data and video transmission

Data Center

Print and Internet-based yellow-page directories

Colombia

  

National and international long-distance telephony

Internet access

VPN data solutions

Managed voice, data and video transmission

Data Center

Print and Internet-based yellow-page directories

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

Country

  

TELINT

Peru

  

National and international long-distance telephony

Public telephony

Internet access

DTH-HFC TV

VPN data solutions

Managed voice, data and video transmission

Satellite TV

Print and Internet-based yellow-page directories

Ecuador

  

National and international long-distance telephony

Public telephony

Internet access

VPN data solutions

Data Center

HFC Pay TV

Uruguay

  

National and international long-distance telephony

Internet access

VPN data solutions

International managed voice, data and video transmission

Data Center

 

* Through its subsidiaries, TELINT offers double- and triple-play services in Brazil, Chile, Colombia, Peru and Ecuador. TELINT also offers double-play services in Argentina.

AMX anticipates that upon completion of the Offer and the TELECOM Offer it will be able to create synergies and opportunities for growth throughout Latin America and, particularly, in these seven countries. The proposed business combination will facilitate the use of the operating companies’ networks, information systems, management and personnel, and will enable them to provide more universally integrated services to their customers. AMX expects that the combined entity will enjoy of a strengthened position towards the major suppliers and will be better able to implement new technologies.

AMX has identified several areas where it may develop specific plans in terms of its consolidation and the creation of synergies: (1) operations, networking and IT; (2) legal, taxation and finance; (3) marketing and distribution; and (4) organization. Upon consummation of the Offer and the TELECOM Offer, AMX expects to work closely with TELINT towards the achievement of results in these four primary areas. AMX has not prepared any estimates as to the specific financial effects of any of these measures.

AMX has not committed to any disposition, liquidation or restructuring of the business assets of either TELINT or TELECOM. AMX does not currently anticipate being required to make any such disposition of assets by the competent regulatory or antitrust authorities as a result of the Offer and/or the TELECOM Offer. Depending on the business structure it may implement in each particular country, AMX may be required to obtain certain authorizations or consents from the competent regulatory or antitrust authorities thereof. Consistent with its past practice, AMX will continue to explore potential acquisition opportunities that may enhance the value of its business portfolio, and may decide to carry out any such acquisition directly, through TELINT and/or through any of their respective subsidiaries.

AMX provides services in many of the same countries where TELINT has significant business operations, including wireless telecommunication services in Paraguay and Uruguay, fixed-line and wireless telecommunication services in Guatemala, El Salvador, Honduras, Nicaragua and Panama, fixed-line, wireless and broadband services in the Dominican Republic and Puerto Rico, and wireless telecommunication and value added services in Jamaica.

Plans with Respect to TELINT

Upon completion of the Offer and the TELECOM Offer, and assuming that AMX will successfully acquire a substantial majority of the TELINT Shares (other than the TELINT Shares currently owned by TELECOM), AMX will hold a controlling interest in TELINT. AMX’s immediate priority will be to ensure that both companies can continue providing high-quality services to their subscribers and working efficiently to achieve the generation of synergies and opportunities for growth throughout Latin America.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

AMX may decide to change the capital structure and financing practices of TELINT’s subsidiaries. In particular, AMX or its subsidiaries may decide, at any time prior to, during and after the Offer, to supply financing to TELINT, TELECOM and TELMEX and/or any of their respective subsidiaries.

Contingent upon the outcome of the Offer and the TELECOM Offer and upon the development of AMX’s business plan as with respect to the combined entity, AMX could decide to implement certain changes in the organizational structure of TELINT and its subsidiaries. For instance, while it currently has no specific plans to that effect, AMX could cause TELINT to restructure or merge some of its subsidiaries in certain markets.

In addition, following the consummation of the Offer and the TELECOM Offer, AMX expects to review TELINT’s past dividend and share repurchase practices and its capitalization and leverage ratios. AMX has yet to develop any specific plans in that regard and believes that TELINT can continue to operate successfully as an independently capitalized and funded group.

AMX does not anticipate making any material change in TELINT’s management following the Offer and the TELINT Offer. However, if the TELINT Shares are delisted in both Mexico and the U.S., AMX would implement certain changes in the composition of TELINT’s board of directors, including removing those directors who were appointed by the public.

Because the consummation of the Offer is not conditioned upon the acquisition of a minimum number of TELINT Shares, AMX could complete the Offer but hold less than 100% (one hundred percent) of the TELINT Shares. The existence of minority shareholders at TELINT may generate additional expenses and result in administrative inefficiencies. For example, AMX may be precluded from cancelling the registration of the TELINT Shares or from conducting certain types of reorganizations involving TELINT and its subsidiaries that would result in significant benefits to the combined entity.

Plans with Respect to TELECOM

Contingent upon the outcome of the TELECOM Offer, AMX may decide to implement certain changes in the organizational structure of TELECOM and its subsidiaries. For instance, although AMX does not currently have any plans to such effect, AMX could decide to restructure or merge TELECOM or any of its subsidiaries with or into other entities within AMX’s group.

AMX or its subsidiaries may decide, at any time prior to, during and after the Offer and the TELECOM Offer, to supply financing to TELINT, TELECOM and TELMEX, and/or their respective subsidiaries.

Following the consummation of the TELECOM Offer, AMX expects to make a decision with respect to the ongoing registration of the TELECOM Shares in the various markets in which such shares are listed for trading, and to review TELECOM’s past dividend and share repurchase practices and its capitalization and leverage ratios.

Cancellation of the Registration of the TELINT Shares

For additional information concerning the maintenance or cancellation of the registration of the TELINT Shares with the RNV, see Section 17 of this Disclosure Statement, “Maintenance or Cancellation of the Registration.”

Plans with Respect to TELMEX

Although the acquisition of TELECOM will result in AMX holding a controlling interest in TELMEX, AMX does not plan to integrate its operations with the business operations of TELMEX, although it may consider potential synergies. AMX or its subsidiaries may decide, at any time prior to, during and after the Offer, to supply financing to TELINT, TELECOM and TELMEX or their respective subsidiaries.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

12. CAPITAL RESOURCES

AMX is offering to purchase up to 100% (one hundred percent) of the outstanding shares of TELINT, provided that each TELINT shareholder may elect to receive (i) AMX Series L shares based upon an exchange ratio of 0.373 Series L shares of AMX per TELINT Share, or (ii) the Purchase Price in cash.

Those TELINT’s shareholders who may decide to participate in the offer may elect to receive (i) 0.373 AMX Shares in exchange for each TELINT Share, it being understood that the AMX Shares are not subject and shall not be deemed subject to the Offer but shall be deemed to constitute an integral element of the Offer, or (ii) the Purchase Price, or Ps.11.66 in cash per TELINT Share.

The amount of capital resources required by América Móvil to consummate the Offers will depend largely on the decision of the holders of TELINT Shares that may elect to participate in the TELINT Offer and the U.S. Offer, as to whether to tender their TELINT Shares in exchange for cash or for AMX Shares. TELECOM has advised AMX that it will not participate in the Offer.

Should TELINT’s shareholders elect to receive the Purchase Price in cash, the aggregate amount of cash that AMX would require to complete the Offer, including the applicable fees and expenses, would be approximately Ps.82.5 billion, although it is not expected to exceed Ps.61.5 billion. Neither the Offer nor the TELECOM Offers is condition upon the availability of external financing sources.

AMX has sufficient cash and cash equivalents available to complete the Offer and the TELECOM Offer, including in the event that the Offer is exercised in full. As of December 31, 2009, AMX’s cash and cash equivalents were Ps.27.4 billion, or approximately U.S.$2.1 billion at the December 31, 2009 exchange rate. Since then, AMX has capitalized on the existence of favorable market conditions to raise a significant amount of additional financing resources through the issuance of debt securities in several markets. In March 2010, AMX issued three series of Peso-denominated debt instruments in the Mexican market, including Ps.4.6 billion in debt due in 2015, which bears interest at a rate equal to Mexico’s Interbank Balanced Rate (Tasa de Interés Interbancaria de Equilibrio, or “TIIE”), Ps.7 billion 8.60% notes due 2010, and Ps.3.27 billion, zero-coupon non-interest bearing notes due 2025. In addition, in March 2010, AMX issued three series of U.S. dollar-denominated debt instruments in the international markets, including U.S.$750 million 3.625% notes due 2015, U.S.$2 billion 5.000% notes due 2020, and U.S.$1.25 billion 6.125% notes due 2040. In April 2010, AMX issued SF$230 million 2.25% notes due 2015, guaranteed by Telcel, an indirect subsidiary of AMX, in the Swiss market.

In addition, AMX has access to other cash resources in amount sufficient to satisfy its funding requirements, including cash generated from its operations during 2010, drawings under committed facilities from export credit agencies totaling approximately $1 billion, and a revolving credit line for US$2 billion maturing in 2011. For additional information concerning AMX’s debt, see AMX’s audited consolidated financial statements as of and for the year ended December 31, 2009, which are attached as Exhibit 26(k) to this Disclosure Statement.

AMX will pay for all the expenses incurred in connection with the Offer, the U.S. Offer and the TELECOM Offer, which amount to approximately Ps.89 million. Such expenses include, among others:

 

   

Application review and processing fees in the amount of Ps.15,708;

 

   

Underwriting and exchange fees and commissions in the amount of Ps.10,000,000;

 

   

Financial advisors’ fees in the amount of Ps.20,500,000;

 

   

Legal fees in the amount of Ps.10,000,000;

 

   

Auditors’ fees in the amount of Ps.4,819,000;

 

   

Printing costs in the amount of Ps.100,000; and

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

   

Publication costs in the amount of Ps.75,000.

The above does not include the costs and expenses, other than legal expenses, incurred in connection with the U.S. Offer.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

13. CAPITAL STRUCTURE

As of the Commencement Date, AMX did not own, whether directly or indirectly, any TELECOM Shares.

Assuming that AMX will acquire all of the TELECOM Shares in connection with the Offer, AMX will own 100% (one hundred percent) of the shares of stock of TELECOM; provided, that if the condition set forth in Article 89(I) of the General Corporations Law is not satisfied, then a subsidiary of AMX will purchase one (1) TELECOM Share.

Upon consummation of the Offer and giving effect to the TELECOM Offer, AMX’s organizational structure will be as follows:

LOGO

*For additional information concerning AMX’s subsidiaries, see AMX’s Annual Report and AMX’s Quarterly Report.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

14. CONSEQUENCES OF THE OFFER

The consummation of the Offer will cause the number of TELINT shareholders to decrease significantly and, as a result, there may be no active secondary market for the TELINT Shares after the Expiration Date.

Until such time as the registration of the TELINT Shares with the RNV and the BMV shall have been cancelled, TELINT will remain subject to the provisions contained in the LMV, the General Rules and other applicable provisions, including those governing the periodic disclosure of information and the supervision and surveillance powers of the CNBV.

As announced by AMX, subject to the satisfaction of the applicable requirements AMX intends to cancel the registration of the TELINT Shares and the TELECOM Shares with the RNV. Such cancellation is subordinated to the primary purpose of the Offer and the TELECOM Offer, which is for AMX to acquire up to 100% (one hundred percent) of the outstanding shares of TELINT and TELECOM. In other words, in conducting the Offer and the TELECOM Offer, AMX does not primarily seek to obtain the cancellation of the registration of the TELINT Shares and the TELECOM Shares with the RNV, and such cancellation will be a consequence of the acquisition of the TELINT Shares and the TELECOM Shares by AMX and will be subject to the satisfaction of all applicable legal requirements and the receipt of all the requisite corporate approvals.

As described in sections 17 and 19 of this Disclosure Statement, “Maintenance or Cancellation of the Registration” and “Trust for the Acquisition of Shares Subsequent to the Cancellation of the Registration,” respectively, if upon completion of the Offer the CNBV approves the cancellation of the TELINT Shares with the RNV and the BMV, but there are still any TELINT Shares held by the public, pursuant to Article 108(I)(c) of the LMV the Issuer will establish an irrevocable management trust (the “Trust”) and transfer thereto, for a term of not less than six (6) months from the date of cancellation of the registration of the TELINT Shares with the RNV, a number of Series L AMX Shares sufficient to enable the holders of any TELINT Shares not tendered in connection with the Offer, to subscribe such Series L shares based upon the same exchange ratio as in the Offer, and cash resources in an amount sufficient to pay the Purchase Price in respect of any such TELINT Shares. Any TELINT shareholder that elects not to tender his/her TELINT Shares in connection with the Offer, or to subsequently transfer such shares to the aforementioned Trust, will become a shareholder of a privately held company. The TELINT Shares will lose their liquidity, which will in turn have a material adverse effect their market price.

In any event, AMX will observe all applicable legal provisions to ensure the protection of the public’s interests and the market generally, as required by the LMV.

The Series L of AMX to be subscribed by the holders of the TELINT Shares in connection with the Offer are limited-voting shares, no par value, issued in registered form. For additional information, see sections 15 and 16 of this Disclosure Statement, “Risk Factors” and “Rights of the Shareholders,” respectively.

AMX does not expect the consummation of the Offer to result in any material violation of the applicable laws and regulations, or the regulatory requirements imposed by the applicable antitrust and other laws.

For additional information with respect to AMX’s pro forma financial information, see the pro forma financial statements included as Exhibit 26(d) in this Disclosure Statement.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

If consummated, the Offer and the TELECOM Offer will have the following effect on AMX’s capital:

 

     Prior to the Offers    Following the Offers
(w/o cash at the TELINT level(**)
   Following the Offers
(all cash at the TELINT Level)(*)

Series

   Number of
Shares
Outstanding
   % of
Capital
Stock
    Outstanding
Capital
   Number of
Shares
Outstanding
   % of
Capital
Stock
    Outstanding
Capital
   Number of
Shares
Outstanding
   % of
Capital
Stock
    Outstanding
Capital

“A”

   445,330,920    1.39   $ 3,711,091.00    445,330,920    1.06   $ 3,711,091.00    445,330,920    1.13   $ 3,711,091.00

“AA”

   11,712,316,330    36.48   $ 97,602,635.99    11,712,316,330    27.97   $ 97,602,635.99    11,712,316,330    29.85   $ 97,602,635.99

“L”

   19,950,883,206    62.14   $ 166,257,359.90    29,717,958,608    70.97   $ 247,649,654.84    27,079,449,276    69.01   $ 225,662,077.10

Total

   32,108,530,456    100.00   $ 267,571,086.89    41,875,605,858    100.00   $ 348,963,381.83    39,237,096,526    100.00   $ 326,975,804.09

 

(*) Assuming that none of the TELINT shareholders participating in the TELINT Offer will elect the cash option.
(**) Assuming that all of the TELINT shareholders participating in the TELINT Offer will elect the cash option.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

15. RISK FACTORS

The Offer involves various material risks and consequences. As a result, TELINT’s shareholders should consider such risks, including, without limitation, those described below, before making any decision as to whether or not to participate in the Offer.

The offering price is fixed and will not be adjusted in response to market fluctuations

AMX is offering to purchase the TELINT Shares based upon an exchange ratio of 0.373:1 and, as a result, TELINT’s shareholders will receive 0.373 Series L shares of AMX for each TELINT Share tendered by them in connection with the Offer, or Ps.11.66 in cash. AMX will not adjust the exchange ratio in response to any fluctuation in the market price of the securities subject matter of the Offer. The market price of the TELINT Shares may vary significantly between the date of this Disclosure Statement and throughout the Offering Period.

The liquidity of any TELINT Shares not tendered in connection with the Offer may be adversely affected

AMX intends to acquire up to 100% (one hundred percent) of the shares of stock of TELINT in connection with the Offer, and to promote the cancellation of the registration of the TELINT Shares with the RNV and the BMV. The market for any remaining TELINT Shares may be less liquid than the market for such shares prior to the Offer, and the market value of such shares could decrease significantly with respect to their value prior to the Expiration Date, particularly if the TELECOM Shares are effectively cancelled with the RNV and delisted from the BMV.

If you do not tender your TELINT Shares in connection with the Offer, you will remain a minority shareholder of TELINT and there may be no liquid marked for the TELINT Shares

If you do not tender your TELINT Shares in connection with the Offer, upon completion of the Offer you will become a minority shareholder in TELINT and will have limited rights, if any, to influence the outcome of any decision requiring shareholder approval, including the election of directors, the acquisition or transfer of material assets, the issuance of shares or other securities, and the payment of dividends on the TELINT Shares. Mexican law affords limited rights to minority shareholders. Under Mexican law, AMX may be required to conduct a subsequent offer to purchase any remaining TELINT Shares, or to establish a trust for the acquisition of any publicly held TELINT Shares. However, AMX cannot predict whether the conditions that would trigger such obligation will occur. In addition, upon completion of the Offer the market for the TELINT Shares may become less liquid. As a result, the price for any future transfer of TELINT Shares could be significantly lower than the price per share reflected by the exchange ratio applicable to the Offer.

In addition, unless the CNBV approves the cancellation of the TELINT Shares with the RNV, such shares will continue to trade on the BMV. Pursuant to Article 108 of the LMV, the CNBV may cancel the registration of any securities with the RNV in any of the events set forth in such provision, if it determines that the protection of the public’s interests has been ensured and the conditions set forth in such Article 108 have been satisfied.

Following the consummation of the Offer, the market liquidity of the TELINT Shares will be materially and adversely affected as a result of the cancellation of the registration of such shares with the RNV and the BMV, given that in all likelihood there will be no further active trading market in which to sell such shares. As a result, the Purchase Price of such TELINT Shares would be substantially lower than the price offered in connection with the Offer.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

If you do not tender your TELINT Shares in connection with the Offer, you may in the future cease to receive dividend payments from TELINT

TELINT paid dividends in each of 2007, 2008 y 2009. Following the consummation of the Offer, TELINT could or AMX could cause TELINT to reduce or discontinue the payment of dividends and allocate the relevant resources to make business acquisitions or meet its payment obligations, including, without limitation, its obligations under any financing arrangement that AMX and TELINT or its subsidiaries may enter into from time to time. As a result, you should not assume that TELINT will continue to pay dividends on the TELINT Shares if you elect not to tender your TELINT Shares in connection with the Offer.

As announced by AMX, subject to the satisfaction of the applicable requirements AMX intends to cancel the registration of the TELINT Shares and the TELECOM Shares with the RNV. Such cancellation is subordinated to the primary purpose of the Offer and the TELECOM Offer, which is for AMX to acquire up to 100% (one hundred percent) of the outstanding shares of TELINT and TELECOM. In other words, in conducting the Offer and the TELECOM Offer, AMX does not primarily seek to obtain the cancellation of the registration of the TELINT Shares and the TELECOM Shares with the RNV, and such cancellation will be a consequence of the acquisition of the TELINT Shares and the TELECOM Shares by AMX and will be subject to the satisfaction of all applicable legal requirements and the receipt of all the requisite corporate approvals.

AMX’s failure to acquire a substantial majority of the outstanding capital stock of TELINT could affect its ability to complete any post-closing change in the organizational structure of the combined company, which could reduce or delay the cost savings or revenue benefits to the combined company

The Offer is not conditioned upon the acquisition of a minimum number of TELINT Shares. In addition, under Mexican law, AMX will only be permitted to apply for the cancellation of the registration of the TELINT Shares with the RNV and to delist such shares on the BMV if at least 95% (ninety five percent) of the holders of TELINT Shares vote favorably (it is the applicable threshold required by Mexican Law to request cancelation of the registration of shares with the RNV and its subsequent delisting from the BMV). As a result, AMX could complete the Offer but hold less than 100% (one hundred percent) of the TELINT Shares. The existence of minority shareholders at TELINT and the non-cancellation of the registration of the TELINT Shares with the RNV and the fact that TELINT Shares remain listed on the BMV, may generate additional expenses and result in administrative inefficiencies. For example, AMX may be precluded from conducting certain types of changes in the organizational structure of TELINT and its respective subsidiaries that would result in significant benefits to the combined entity. In addition, AMX may be required to maintain separate committees at the AMX and TELINT boards of directors, and may be subject to separate reporting requirements with Mexican authorities. In addition, all transactions between AMX and TELINT would be required under Mexican law to be on an arm’s length basis, which may limit AMX’s ability to achieve certain savings and to conduct the joint operations as a single business unit in order to achieve its strategic objectives. As a result, it may take longer and be more difficult to effect any post-closing change in the organizational structure and the full amount of the cost synergies and revenue benefits for the combined company may not be obtained or may only be obtained over a longer period of time. This may adversely affect AMX’s ability to achieve the expected amount of cost synergies and revenue benefits after the Offer is completed.

In case of consummation of the Offer, AMX may fail to realize the business growth opportunities, revenue benefits, cost savings and other benefits anticipated from, or may incur unanticipated costs associated with the Offer

Acquisition of TELECOM Shares by AMX may not achieve the business growth opportunities, revenue benefits, cost savings and other benefits that AMX anticipates. AMX believes the consideration for the Offers is justified by the benefits it expects to achieve by combining its operations with TELECOM and TELINT. However, these expected business growth opportunities, revenue benefits, cost savings and other benefits may not develop and other assumptions upon which the offer consideration was

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

determined may prove to be incorrect, as, among other things, such assumptions were based on publicly available information.

AMX may be unable to fully implement its business plans and strategies for the combined businesses due to regulatory restrictions. Each of AMX and TELINT is subject to extensive government regulation, and AMX may face regulatory restrictions in the provision of combined services in some of the countries in which it operates. For example, in Brazil, AMX’s and TELINT’s businesses are regulated by the Brazilian National Telecommunications Agency, or “Anatel”. Upcoming regulations by Anatel, which focus on economic groups with significant market powers, would impose new cost-based methodologies for determining interconnection fees charged by operators in Brazil. AMX cannot predict whether Anatel will impose specific regulations that would affect its combined operations more adversely than they would affect its individual operations. In Mexico, Telcel is part of an industry-wide investigation by the Federal Competition Commission to determine whether any operators possess substantial market power or are engaged in monopolistic practices in certain segments of the Mexican telecommunications market. TELECOM is the direct holder of approximately 59.4% (fifty nine point four percent) of the outstanding capital stock of TELMEX, and AMX will be acquiring part of TELMEX through the Offer. AMX cannot predict whether the Federal Competition Commission or other governmental entities would renew or revise its investigations to take into account the combined businesses.

Under any of these circumstances, the business growth opportunities, revenue benefits, cost savings and other benefits anticipated by AMX to result from the business combination and the change of its organizational structure may not be achieved as expected, or at all, or may be delayed. To the extent that AMX incurs higher integration costs or achieve lower revenue benefits or fewer cost savings than expected, its results of operations, financial condition and the price of its shares may suffer.

If you elect to participate in the Offer, you will receive limited-voting shares of AMX

Holders of TELECOM Shares who may elect to participate in the Offer will be entitled to subscribe Series L shares of the capital stock of AMX, which shares are not subject to and are not included in the Offer but are an integral element thereof.

Pursuant to AMX’s bylaws, holders of the AMX L Shares may vote as a class to appoint two members of AMX’s board of directors and approve any matter affecting their rights as a class. In addition, they may vote together with the other series of shares to approve certain matters, including, among others, the transformation or merger of AMX, the transformation of AMX from one type of company to another, any merger involving AMX, the extension of the corporate life or the voluntary dissolution of AMX, any change in its corporate purpose, any change of nationality, the cancellation of registration of AMX’s shares with the BMV, and any transaction involving 20% or more of AMX’s consolidated assets.

For additional information regarding the AMX L Shares and a comparison between such shares and the A-1 TELECOM Shares, see Section 16 of this Disclosure Statement, “Rights of the Shareholders.”

AMX’s shareholders will experience dilution as a result of the Offer

The issuance of shares at a price over book value results in an immediate dilution in the stockholders’ equity per share for any buyer who may subscribe such shares at the pre-established price in connection with the Offer. As a result, the book value per share for any investor who may elect to subscribe shares in connection with the Offer will differ from his initial contribution and will experience dilution in the net profit per share.

The fact that the AMX Shares may trade at a discount over book value is separate and different from the risk that AMX’s stockholders equity per share may decrease. AMX cannot predict whether its shares of stock will trade at above or below its it book value per share. Pursuant to AMX’s financial statements as of December 31, 2009, the subscription or reference price in the Offer is higher than the book value per AMX Share. See Section 24.2(h) of this Disclosure Statement, “Dilution.”

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

See also Section 3, “Critical Information—Risk Factors,” in AMX’s Annual Report (pages 7 to 18), which is incorporated herein by reference.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

16. RIGHTS OF THE SHAREHOLDERS

a. The TELINT Shares

According to TELINT’s Annual Report, TELINT’s capital is represented by Series A shares, Series AA shares, and Series L shares, no par value. All such shares are fully subscribed and paid-in.

The Series AA and Series A shares are full-voting shares. Holders of the Series L shares are entitled to vote only with respect to certain limited matters. Series “A” shares and Series “AA” shares carry identical rights except for the ownership restrictions imposed by the Series AA shares, which cannot be held by non-Mexican nationals. The Series AA must represent at all times at least 51% of the aggregate number of Series AA and Series A shares, and in accordance with TELINT’s bylaws may only be acquired by Mexican investors.

Each Series AA and Series A share can be converted into a Series L share at the election of its holder, so long as the Series AA shares represent not less than 20% of the outstanding shares of stock or 51% of the aggregate number of Series AA and Series A shares. As of December 31, 2008, the Series AA shares represented 44.29% of the outstanding shares of stock and 95.13% of the aggregate number of Series AA and Series A shares.

b. The AMX Shares

As of the date hereof, AMX’s capital stock comprises Series AA common shares, Series A common shares, and Series L limited-voting shares, all of which have no par value and are issued in registered form. All of the outstanding shares of AMX are fully subscribed and paid-in. Any TELINT shareholder who may elect to participate in the Offer will be entitled to subscribe Series L shares of AMX, which shares are not included in the Offer.

Holders of the Series L shares are entitled to vote only in limited circumstances, including the transformation of AMX from one type of corporation to another, any merger involving AMX, the extension of its corporate life, its voluntary dissolution, any change in its corporate purpose, any change of nationality, the removal of AMX’s shares from listing on the BMV or any foreign stock exchange, and any other matter that may affect the rights of the holders of the Series L shares.

The Series AA shares, which must represent at all times at least 51% of the aggregate number of Series AA and Series A shares, may only be held by investors who qualify as Mexican pursuant to Mexico’s Foreign Investment Law (Ley de Inversión Extranjera) and the bylaws of AMX. Each Series AA and Series A share may be exchanged, at the election of its holder, for one Series L share; provided, that the Series AA shares may not represent at any time less than 20% of AMX’s capital or less than 51% of the aggregate number of Series AA and Series A shares.

Absent the appointment of a director by the minority shareholders, the holders of the Series L shares, voting as a class pursuant to a resolution adopted at a special shareholders meeting convened to such effect, will be entitled to appoint two members of the Board of Directors of AMX and two alternates; provided, that the aggregate number of directors appointed by the minority shareholders and the holders of the Series L shares, as a class, may in no event exceed the aggregate percentage of the capital stock represented by the Series L shares, divided by 10.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

The following table contains a brief summary of the principal differences between TELINT’s Series A and Series L shares, and the AMX Shares:

 

TELINT A Shares

  

TELINT L Shares

  

AMX L Shares

Voting Rights
Holders of TELINT A Shares, together with the holders of TELINT AA Shares, are entitled to vote as a combined class for a majority of TELINT’s directors.    Holders of TELINT L Shares entitled to vote only to elect two members of the Board of Directors and the corresponding alternate directors.    Holders of AMX L Shares entitled to vote only to elect two members of the Board of Directors and the corresponding alternate directors.
Under Mexican law, holders of TELINT A Shares are entitled to vote as a class on any action that would prejudice the rights of the holders of TELINT A Shares.    Under Mexican law, holders of AMX L Shares are entitled to vote as a class on any action that would prejudice the rights of the holders of AMX L Shares.    Under Mexican law, holders of AMX L Shares are entitled to vote as a class on any action that would prejudice the rights of the holders of AMX L Shares.
Under Mexican law, holders of 20% or more of all outstanding TELINT A Shares would be entitled to request judicial relief against any such action taken without such vote.    Under Mexican law, holders of AMX L Shares, a holder of [20% or more of all outstanding] AMX L Shares would be entitled to judicial relief against any such action taken without such a vote.    Under Mexican law, holders of AMX L Shares, a holder of [20% or more of all outstanding] AMX L Shares would be entitled to judicial relief against any such action taken without such a vote.

Holders of TELINT A Shares, together with the beneficial holders of TELINT AA Shares, are entitled to vote as a combined class on all matters at any meeting of TELINT shareholders.

 

Each TELINT A Share may be exchanged at the option of the holder for one TELINT L Share, provided that the TELINT AA Shares may never represent less than 20% of TELINT’s capital stock.

  

Holders of TELINT L Shares are entitled to vote on the following matters together with the holders of the TELINT AA Shares and the TELINT A Shares. A resolution on any of these matters requires the affirmative vote of both a majority of all outstanding shares and a majority of the TELINT AA Shares and the TELINT A Shares voting together:

 

•       the transformation of TELINT from one type of company to another;

 

•       any merger in which TELINT is not the surviving entity or any merger with an entity whose principal corporate purposes are different from those of TELINT (when TELINT is the surviving entity); and

 

•       cancellation of the registration of TELINT shares on the RNV, the BMV and any foreign stock exchange on which they are registered.

  

Holders of AMX L Shares are entitled to vote on the following matters together with the holders of the AMX AA Shares and the AMX A Shares. A resolution on any of these matters requires the affirmative vote of both a majority of all outstanding shares and a majority of the AMX AA Shares and the AMX A Shares voting together:

 

•       The transformation of AMX from one type of company to another;

 

•       any merger of AMX;

 

•       the extension of AMX’s corporate life;

 

•       AMX’s voluntary dissolution;

 

•       change in AMX’s corporate purpose;

 

•       transactions that represent 20% or more of AMX’s consolidated assets;

 

•       a change in AMX’s state of incorporation;

 

•       removal of AMX’s shares from listing on the BMV or any foreign stock exchange; and

 

•       any action that would prejudice the rights of holders of AMX L Shares.

Dividend Rights
Holders of TELINT A Shares are entitled to participate in dividend or other distributions at the time such dividend or other distribution is declared.   

Holders of TELINT L Shares are entitled to participate in dividend or other distributions at the time such dividend or other distribution is declared.

  

Holders of AMX L Shares are entitled to receive a cumulative preferred annual dividend of Ps.0.00042 per share before any dividends are payable in respect of any other class of AMX’s capital stock.

 

If a dividend is paid after payment of the AMX L Share preferred dividend, such dividend must first be allocated to the payment of dividends to AMX A Shares and AMX AA Shares, in equal amounts, up to the amount of the AMX L Share preferred dividend, and then to all classes of shares, such that the dividend per share is equal.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

TELINT A Shares

  

TELINT L Shares

  

AMX L Shares

Liquidation Preference
None.    None.   

Upon liquidation, AMX L Shares are entitled to a liquidation preference equal to: (i) accrued but unpaid AMX L Share preferred dividends, plus (ii) Ps. 0.00833 per share (representing the capital attributable to AMX L Shares as set forth in AMX’s bylaws) before any other distribution is made.

 

Following payment in full of any such amount, holders of AMX AA Shares and AMX A Shares are entitled to receive, if available, an amount per share equal to the liquidation preference paid per AMX L Shares. Following payment in full of the foregoing amounts, all shareholders share equally, on a per share basis, any remaining amounts payable in respect of AMX’s capital stock.

Limitations on Share Ownership with Respect to non-Mexican Investors
Pursuant to TELINT’s bylaws, non-Mexican investors are not permitted to own more than 49% of TELINT’s capital stock.    Pursuant to TELINT’s bylaws, non-Mexican investors are not permitted to own more than 49% of TELINT’s capital stock.    On March 17, 2010, AMX’s shareholders approved an amendment to the company’s nationality, to preclude the participation of non-Mexicans therein. The AMX L Shares are “neutral” shares and, as such, do not constitute a foreign investment under Mexican law
Limitations on Share Ownership
TII A Shares and TII L Shares together cannot represent more than 80% of TELINT’s capital stock. At least 20% of TELINT’s capital stock must consist of TII AA Shares.    TII A Shares and TII L Shares together cannot represent more than 80% of TELINT’s capital stock. 20% of TELINT’s capital stock must consist of TII AA Shares.    AMX L Shares and AMX A Shares together cannot represent more than 80% of AMX’s capital stock. 20% of AMS’s capital stock must consist of AMX AA Shares.
Capital Increases and Preemptive Rights

Any capital increase must be represented by new shares of each series (including TII A Shares) in proportion to the number of shares of each series outstanding.

 

In the event of a capital increase, except in certain circumstances such as mergers, convertible debentures, public offers and placement of repurchased shares, a holder of exiting TII A Shares has a preferential right to subscribe to a sufficient number of TII A Shares to maintain that holders existing proportionate holdings of TII A Shares.

  

Any capital increase must be represented by new shares of each series (including TII A Shares) in proportion to the number of shares of each series outstanding.

 

In the event of a capital increase, except in certain circumstances such as mergers, convertible debentures, public offers and placement of repurchased shares, a holder of exiting TII A Shares has a preferential right to subscribe to a sufficient number of TII A Shares to maintain that holders existing proportionate holdings of TII A Shares.

  

Any capital increase must be represented by new shares of each series (including AMX L Shares) in proportion to the number of shares of each series outstanding.

 

In the event of a capital increase, except in certain circumstances such as mergers, convertible debentures, public offers and placement of repurchased shares, a holder of exiting AMX L Shares has a preferential right to subscribe to a sufficient number of AMX L Shares to maintain that holders existing proportionate holdings of AMX L Shares.

At the extraordinary shareholders meeting held March 17, 2010, AMX’s shareholders approved an amendment to AMX’s bylaws so as to include therein a provision precluding the participation of non-Mexican investors in AMX. The inclusion of such provision in AMX’s bylaws is a prerequisite for the consummation of the Offer and is necessary to comply with the provisions contained in TELECOM’s and TELMEX’s bylaws. According to such provision, the ownership of AMX’s shares is reserved to Mexican investors within the meaning of the Foreign Investment Law. However, such provision is not applicable to AMX’s Series L shares, and an interim provision adopted concurrently therewith does not impose ownership restrictions upon the Series A shares issued prior to the aforementioned amendment.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

17. MAINTENANCE OR CANCELLATION OF THE REGISTRATION

As announced by AMX, subject to the satisfaction of the applicable requirements AMX intends to cancel the registration of the TELINT Shares and the TELECOM Shares with the RNV. Such cancellation is subordinated to the primary purpose of the Offer and the TELECOM Offer, which is for AMX to acquire up to 100% (one hundred percent) of the outstanding shares of TELINT and TELECOM. In other words, in conducting the Offer and the TELECOM Offer, AMX does not primarily seek to obtain the cancellation of the registration of the TELINT Shares and the TELECOM Shares with the RNV, and such cancellation will be a consequence of the acquisition of the TELINT Shares and the TELECOM Shares by AMX and will be subject to the satisfaction of all applicable legal requirements and the receipt of all the requisite corporate approvals.

Assuming that TELINT’s shareholders will elect to tender their shares in connection with the Offer, AMX intends purchase up to 100% (one hundred percent) of the TELINT Shares and may file a petition to cancel the registration of such shares with the RNV and the BMV, subject to the consent of at least 95% (ninety five percent) of TELINT’s shareholders. Contingent upon the outcome of the Offer, and subject to the satisfaction of all the conditions set forth in the applicable laws to ensure the protection of the public’s interests, and the approval of the requisite corporate actions, AMX intends to file with the CNBV a petition to cancel the registration of the TELINT Shares with the RNV and the BMV, so that such shares will no longer trade therein.

As described in this Section and in Section 18 below, “Trust for the Acquisition of Shares Subsequent to the Cancellation of the Registration,” if after the completion of the Offer the CNBV approves the cancellation of the TELINT Shares with the RNV and the BMV, but there are still any TELINT Shares held by the public, pursuant to Article 108(I)(c) of the LMV the Issuer will establish the Trust and transfer thereto, for a term of not less than six (6) months from the date of cancellation of the registration of the TELINT Shares with the RNV, a number of Series L AMX Shares or funds sufficient to enable the holders of any TELINT Shares not tendered in connection with the Offer, to subscribe such Series L shares based upon the same exchange ratio as in the Offer, and cash resources in an amount sufficient to pay the Purchase Price in respect of any such TELINT Shares. Any TELINT shareholder that elects not to tender his/her TELINT Shares in connection with the Offer, or to subsequently transfer such shares to the aforementioned Trust, will become a shareholder of a privately held company. The TELINT Shares will lose their liquidity, which will in turn have a material adverse effect their market price.

In any event, AMX will observe all applicable legal provisions to ensure the protection of the public’s interests and the market generally, as required by the LMV.

The CNBV could resolve not to authorize the cancellation of the registration of the TELINT Shares notwithstanding that such cancellation may have been approved by TELINT’s shareholders. In either case, the TELINT Shares would continue to be listed for trading on the BMV.

Legal Provisions Applicable to the Cancellation

Article 108 of the LMV, which sets forth the procedure applicable to the cancellation of the registration with the RNV, provides that such cancellation will only be approved if in the CNBV’s opinion the protection of the publics’ interests has been ensured and all of the conditions set forth in such article have been met. In addition, pursuant to TELINT’s bylaws, the cancellation of the registration with the RNV must be carried out in strict adherence to the LMV and the General Rules.

Potential Cancellation Scenarios

Contingent upon the outcome of the Offer, following the consummation thereof and subject to the satisfaction of all the applicable legal requirements to ensure the protection of the public’s interests, and the approval of all the requisite corporate actions, and assuming that AMX will elect to cancel the registration of the TELINT Shares with the RNV, under applicable law AMX may proceed with such cancellation in accordance with either of the following scenarios:

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

A. Immediate Cancellation.

If warranted by the percentage of shares publicly held after the Offer, and subject to the approval of TELINT’s shareholders, AMX will immediately apply for the cancellation of the TELINT Shares with the RNV and the BMV. The requisite percentage would be at least 95% of the outstanding TELINT shares. However, if the holders of 95% (ninety five percent) or more of the outstanding TELINT Shares approve such cancellation but TELECOM does not meet all the other requirements set forth in Article 8 of the General Rules, including the 300,000 UDIs threshold set in respect of the publicly-held TELECOM Shares, TELECOM would be required to establish a trust in order to conduct a subsequent tender offer unless otherwise approved by the CNBV.

 

B. Deferred Cancellation.

If warranted by the percentage of shares publicly held after the Offer, in the CNBV’s opinion based upon the outcome of the Offer and a detailed review of the terms on which it was completed, AMX will consider conducting a subsequent public offer based on a price equal to the highest of:

 

   

the trading price of such shares on the BMV (which shall for these purposes be the weighted average trading price for the last 30 (thirty) days of reported trading activity for the TELINT Shares, within a period not to exceed the six (6) month-period immediately preceding the subsequent offer or, if the number of trading days within such period is less than 30 (thirty), then the number of days on which such shares were actually traded; or, absent any trading activity occurred during such period, the book value of such shares). For purposes of such determination, the relevant period will include the period subsequent to the announcement of the Offer and, accordingly, there is no guaranty that the resulting price will be equal or similar to the exchange ratio used in connection with the Offer; or

 

   

the book value of per TELINT Share, as the case may be, pursuant to the most recent quarterly report filed with the CNBV and the BMV prior to the commencement of the subsequent offer.

 

   

Notwithstanding the above, based upon TELINT’s financial condition and prospects, it may be requested to the CNBV authorization to determine the offering price in the subsequent offer upon other basis, subject to the submission of evidence of the approval of such basis by TELINT’s board of directors taking into consideration the opinion of its Audit and Corporate Governance Committee, together with a description of the reasons that justify such other price, and a report from an independent expert stating that such other price is consistent with the provisions of Article 108 of the LMV.

AMX cannot anticipate if, when or under what terms and conditions it will conduct a subsequent offer, or if the offering price in connection therewith will be similar to the price determined for purposes of the Offer.

AMX cannot determine if it will elect to maintain the TELINT Shares registered with the RNV and the BMV, or to cancel such registrations as a result of the outcome of the Offer, due to, among others, the following considerations:

 

   

AMX cannot determine the number of TELINT Shares it will acquire in connection with the Offer;

 

   

The Offer is not conditioned upon the acquisition of a minimum number of shares and, accordingly, subject to the terms and conditions set forth in the relevant offering documents, AMX will purchase any such number of TELINT Shares as may be tendered in connection therein;

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

   

AMX cannot guaranty that it will establish a trust upon consummation of the Offer. The creation of any such trust will depend on whether or not AMX elects to cancel the registration with the RNV based upon the outcome of such offers;

 

   

AMX cannot guaranty that it will request the cancellation of the registration of the TELINT Shares with the RNV following any subsequent offer. Any decision to such effect will be contingent upon the number of TELINT Shares acquired by AMX; and

 

   

If the TELINT Shares cease to constitute publicly trades securities as a result of the cancellation of their registration with the RNV, any transfer of such shares by any individual, including any transfer effected through any trust established pursuant to Article 108 of the LMV, will be subject to the Mexican income tax. For additional information on the tax consequences associated with the transfer of shares through such trust, see Section 20 of this Disclosure Statement, “Tax Considerations.”

The time period it takes to effectively cancel the registration of shares with the RNV is undetermined. Generally, it may take up to two (2) months to initiate the process and it is not possible to determine how long it will take to culminate.

Corporate Rights

The exercise of various corporate rights, including the appointment of directors, the commencement of liability actions against the directors, the right to petition the issuance of notice of a shareholders meeting, the right to request a delay for voting with respect to a particular matter, and the right to challenge the resolutions adopted by the shareholders, requires ownership of a given percentage of the capital stock. Accordingly, upon completion of the Offer the number of shares held by persons other than AMX may not be sufficient to exercise such rights.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

18. OPINIONS OF THE BOARD OF DIRECTORS AND THE INDEPENDENT EXPERTS

a. Opinion of TELINT’s Board of Directors

As disclosed by TELINT on March 19, 2010, pursuant to Article 101 of the LMV its Board of Directors, taking into consideration Merrill Lynch’s independent expert opinion and the opinion of TELINT’s Audit and Corporate Governance Committee, both to the effect that the exchange ratio and the Purchase Price offered by AMX in connection with the Offer are justified from a financial standpoint and, accordingly, are fair to TELINT’s shareholders, determined that the exchange ratio and the Purchase Price for purposes of the Offer are fair from a financial standpoint.

In addition, pursuant to Article 101 of the LMV, all members of TELINT’s Board of Directors holding TELINT Shares have informed AMX that they and their related parties intend to participate in the Offer in the terms thereof, assuming that the economic situation and market conditions remain stable. To the best of AMX’s knowledge, TELINT’s Chief Executive Officer, Mr. Oscan Von Hauske, does not hold any TELINT Shares.

Finally, the members of TELINT’s Board of Directors indicated that, notwithstanding the fact that in their opinion they have no conflicts of interests in connection with the Offer, in order to avoid any potential perception as to the existence of any such conflict Messrs. Arturo Elías Ayub and Carlos Slim Domit decided to abstain from participating in any discussion with respect to the Offer, but were nevertheless in agreement with the resolution adopted by the remaining directors. TELECOM has informed AMX that it will not participate in the Offer.

b. Opinion of the Independent Expert Retained by TELINT

As reported by TELINT on March 19, 2010, TELINT’s Audit and Corporate Governance Committee confirmed Merrill Lynch’s appointment as independent expert advisor to TELINT’s Board of Directors for purposes of the issuance of an opinion as to the financial fairness of the exchange ratio and the Purchase Price proposed in connection with the Offer. Based upon the facts disclosed thereto, and the other considerations described in its opinion, a copy of which is attached hereto as Exhibit 26(b), Merrill Lynch advised TELINT’s Board of Directors that the exchange ratio and the Purchase Price offered to TELINT’s shareholders are fair. Recipients of this Disclosure Statement are advised to review Exhibit 26(b) hereto to fully understand such opinion, including the facts upon which it is based and any qualifications thereto. The contents of such opinion were disclosed by TELINT on April 19, 2010.

c. Opinion of AMX’s Financial Advisor, and Independent Expert for Mexican law purposes

On January 13, 2010, AMX’s Board of Directors issued a favorable opinion with respect to the commencement of the Offer by AMX, and resolved, among other things, to authorize AMX to retain a financial advisor as independent expert for purposes of the Offer (and also to act as independent expert fur purposes of, and in accordance with, Mexican law). On February 9, 2010, AMX’s Audit and Corporate Governance Committee issued a favorable opinion with respect to the commencement of the Offer by AMX. Likewise, it resolved, among other things, to ratify the appointment of Credit Suisse Securities (USA) LLC (“Credit Suisse”). Said appointment was approved by AMX’s Board of Directors on January 13, 2010. In connection with the Offer, Credit Suisse was requested (in its capacity as independent expert advisor engaged by AMX’s Board of Directors, in accordance with, and for purposes of, Mexican law) to issue for the information of AMX’s Board of Directors its opinion, from a financial standpoint, as to the financial fairness of the consideration, in cash or in AMX Shares, offered by AMX to TELINT’s shareholders in connection with the Offer. On March 9, 2010, Credit Suisse issued its opinion to AMX Board of Director’s, stating that, as of the date thereto and, based upon the facts disclosed therein, and on other considerations included therein, a copy of which is attached hereto as Exhibit 26(a), the consideration, in cash of in AMX Shares offered to TELINT’s shareholders is reasonable from a financial standpoint to AMX. The opinion was issued solely for the information of AMX’s Board of Directors for purposes of evaluating the Offer from a financial standpoint and not for the benefit of shareholders and is

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

subject to several presumptions, qualifications, limitations and considerations. The opinion does not deal in any way with other aspects of the Offer, and does not purport to be a recommendation, and shall not be understood as a recommendation to the shareholders in connection with their participation in the Offer or any other matter.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

19. TRUST FOR THE ACQUISITION OF SHARES SUBSEQUENT TO THE CANCELLATION OF THE REGISTRATION

Assuming that TELINT’s shareholders will elect to tender their shares in connection with the Offer, AMX intends purchase up to 100% (one hundred percent) of the TELINT Shares and may file a petition to cancel the registration of such shares with the RNV and the BMV, subject to the consent of at least 95% (ninety five percent) of TELINT’s shareholders. Contingent upon the outcome of the Offer and subject to the satisfaction of all the conditions set forth in the applicable laws to ensure the protection of the public’s interests, and the approval of the requisite corporate actions, upon consummation of the Offer AMX intends to file with the CNBV a petition to cancel the registration of the TELINT Shares with the RNV and the BMV, so that such shares will no longer trade therein.

Pursuant to Article 108(I)(c) and other applicable provisions, upon cancellation of the registration of the TELINT Shares the Issuer will establish the Trust and transfer thereto, for a period of not less than six (6) months from the date of cancellation of the registration of the TELINT Shares with the RNV, a number of Series L AMX Shares and cash sufficient to enable the holders of any TELINT Shares not tendered in connection with the Offer and resources in cash, to subscribe such Series L shares based upon the same exchange ratio as in the Offer, in an amount sufficient to pay the Purchase Price in respect of any such TELINT Shares. Any TELINT shareholder that elects not to tender his/her TELINT Shares in connection with the Offer, or to subsequently transfer such shares to the aforementioned Trust, will become a shareholder of a privately held company. The TELINT Shares will lose their liquidity, which will in turn have a material adverse effect their market price.

As announced by AMX, subject to the satisfaction of the applicable requirements AMX intends to cancel the registration of the TELINT Shares and the TELECOM Shares with the RNV. Such cancellation is subordinated to the primary purpose of the Offer and the TELECOM Offer, which is for AMX to acquire up to 100% (one hundred percent) of the outstanding shares of TELINT and TELECOM. In other words, in conducting the Offer and the TELECOM Offer, AMX does not primarily seek to obtain the cancellation of the registration of the TELINT Shares and the TELECOM Shares with the RNV, and such cancellation will be a consequence of the acquisition of the TELINT Shares and the TELECOM Shares by AMX and will be subject to the satisfaction of all applicable legal requirements and the receipt of all the requisite corporate approvals.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

20. TAX CONSIDERATIONS

The following summary contains a description of certain Mexican federal income tax consequences applicable to the Offer, but it does not purport to be a comprehensive description of all of the tax considerations that may be relevant to a decision to participate in the Offer.

This discussion does not constitute, and should not be considered as, legal or tax advice to TELINT’s shareholders. This discussion is for general information purposes only and is based upon the federal tax laws of Mexico as in effect on the date of this Disclosure Statement.

The following considerations may not be applicable to all shareholders alike. Accordingly, TELINT’s shareholders should consult their own tax advisors as to the tax consequences of their participation in the Offer. AMX, the Issuer and the Intermediary assume no liability whatsoever in connection with the tax effects or obligations to those shareholders who may tender their TELINT shares in connection with the Offer.

a. Transfer of the TELINT Shares

Those holders of TELINT Shares that may decide to accept the Offer will transfer their shares for the benefit of AMX. Such transfer may be subject to tax consequences in Mexico.

For purposes of the applicable tax laws, the reference price for tax purposes should be equal to the reference price. However, the reference price may vary for any shareholder able to secure the resolution referred to in Article 26 of Mexico’s Income Tax Law.

The transfer of the TELINT Shares through the BMV in connection with the Offer may have, among others, the following tax consequences depending on the particular situation of each shareholder:

 

  A. Individuals Residents of Mexico

Any individual resident of Mexico not covered by the exception to the condition set forth in Article 109(XXVI) of the Income Tax Law, will be exempt from Mexican income taxes on any gain obtained as a result of the transfer of his/her TELINT Shares through the BMV in connection with the Offer.

Article 109(XXVI) of the Income Tax Law provides for an exemption from taxation in connection with capital gains from the transfer of shares of Mexican issuers carried out through a stock exchange duly licensed in accordance with the LMV, or the transfer of shares of foreign issuers listed in any such exchange.

Notwithstanding the above, Article 109(XXVI) excludes certain transactions from such exemption. Among others, the following transactions remain subject to income tax payment obligations in Mexico: (i) certain transactions by any person or group of persons (as such terms are defined in the Income Tax Law by reference to the LMV) directly or indirectly holding 10% (ten percent) or more of the shares of stock of the relevant issuer or the ability to exercise the control thereof; and (ii) any transfer of shares other than through a stock exchange duly licensed in accordance with the LMV.

 

  B. Non-Mexican Residents

Any income received by any non-Mexican resident as a result of the transfer of shares of Mexican issuers, among others, will be deemed to have originated in Mexico and will be subject to the Mexican income tax.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

Notwithstanding the above, non-Mexican residents will not be subject to Mexican income tax payment obligations to the extent they sell their shares through the BMV; provided that the relevant transaction is exempt from income tax obligations pursuant to the provisions contained in Article 109(XXVI) of the Income Tax Law, as described in the preceding paragraph.

Non-Mexican residents holding shares of the Issuer should be aware of the fact that, to the extent that they transfer such shares through the BMV in connection with the Offer, they may be subject to taxation pursuant to the applicable laws of their place or residence or country of origin. Such shareholders should consult with their own tax advisors as to the potential tax consequences of such transfer outside of Mexico.

Individuals or entities that are residents of a country that is party with Mexico to a treaty to avoid double taxation, may abide themselves of the benefits afforded by the applicable treaty by submitting evidence of their residence in such country for tax purposes, appointing a representative for tax purposes in Mexico, and giving notice of such designation to Mexican tax authorities, in addition to satisfying the requirements imposed by the applicable tax laws.

The tax consequences in Mexico from the transfer of TELINT Shares by non-Mexican residents may vary depending upon the availability of a treaty to avoid double taxation between Mexico and the home country of the relevant TELINT shareholder.

 

  C. Mexican Resident Entities, and Non-Mexican Entities That Have a Permanent Establishment in Mexico

Gains obtained by legal entities that are residents of Mexico and non-Mexican Residents who have a permanent place of business in Mexico, as a result of the transfer of their TELINT Shares through the BMV in connection with the Offer, will be considered as taxable income for purposes of the determination of the income tax rate payable thereon.

The gain on the transfer of any shares by any legal entity resident of Mexico or any non-Mexican resident with a permanent place of business in Mexico, will be determined based upon the reference price per share and the average cost of each such share in terms of the applicable law, taking into consideration the particular circumstances of such person.

b. Subscription of the Series L AMX Shares

The subscription of the Series L AMX Shares by those TELINT shareholders participating in the Offer should not give rise to any income tax payment obligation in accordance with the Mexican tax laws in effect as of the date of this Disclosure Statement.

c. Transfer of Unregistered Securities

Assuming that TELINT’s shareholders will elect to tender their shares in connection with the Offer, AMX intends purchase up to 100% (one hundred percent) of the TELINT Shares and may file a petition to cancel the registration of such shares with the RNV and the BMV, subject to the consent of at least 95% (ninety five percent) of TELINT’s shareholders. Contingent upon the outcome of the Offer, and subject to the satisfaction of all the conditions set forth in the applicable laws to ensure the protection of the public’s interests, and the approval of the requisite corporate actions, AMX intends to file with the CNBV a petition to cancel the registration of the TELINT Shares and the TELINT Shares with the RNV and the BMV, so that such shares will no longer trade therein.

If the TELINT Shares cease to constitute publicly trades securities as a result of the cancellation of their registration with the RNV, any transfer of such shares by any individual, including any transfer effected through the Trust, will be subject to the Mexican income tax.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

21. LEGAL CONDITIONS

By means of the Offer, AMX is inviting TELINT’s shareholders, during the period from the Commencement Date to the Expiration Date, to enter into a binding arrangement in the terms set forth in this Disclosure Statement. By participating in the Offer and tendering or causing their TELINT Shares to be tendered to Inbursa in accordance with the procedure set forth in this Disclosure Statement, TELINT’s shareholders fully and consent to the terms and conditions of the Offer as described in this Disclosure Statement. Such acceptance shall become irrevocable as of the Expiration Date.

On the Expiration Date, those TELINT shareholders who may have accepted the Offer and tendered or caused their TELINT Shares to be tendered in accordance with the procedure set forth in this Disclosure Statement will be deemed to have entered into a binding agreement subject to the terms and conditions set forth in this Disclosure Statement.

In addition, by participating in the Offer each TELINT shareholder represents, for the benefit of AMX, that (i) he/she holds all legal and valid title to the TELINT Shares tendered by him/her in connection with the Offer for purposes of participating therein in the terms and conditions set forth in this Disclosure Statement, (ii) there is no right of any third party attaching to the TELINT Shares tendered by him/her in connection with the Offer, which could limit or restrict such participation in any manner whatsoever, and (iii) there is no legal, regulatory or contractual provision that could limit or restrict the acquisition of his/her TELINT Shares by AMX in connection with the Offer, and/or the exercise by AMX of the rights pertaining to such TELINT Shares.

 

22. RECENT DEVELOPMENTS

For information concerning certain recent developments affecting AMX, see AMX’s Additional Reports, which are available for consultation through AMX at www.americamovil.com. For ease of reference, copies of such reports are attached as Exhibits 26(f) and 26(g) to this Disclosure Statement.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

23. ADDITIONAL INFORMATION

In this section you will find certain additional information included in AMX’s Form F-4 Registration Statement under the Securities Act of 1933 (“Form F-4”), to be filed by AMX with the SEC in connection with the U.S. Offer. The information contained in this Section will be updated and/or amended in accordance with AMX’s Form F-4 as filed with the SEC.

AMX Selected Consolidated Financial Data

Form F-4 incorporates by reference AMX’s audited consolidated financial statements as of December 31, 2008 and 2009 and for each of the three years ended December 31, 2007, 2008 and 2009. AMX’s consolidated financial statements have been prepared in accordance with Mexican Financial Reporting Standards (Normas de Información Financiera Mexicanas or “Mexican FRS”) and are presented in Mexican pesos. The financial statements of AMX’s non-Mexican subsidiaries have been adjusted to conform to Mexican FRS and translated to Mexican pesos. See Note 2(a)(ii) to AMX’s audited consolidated financial statements.

Mexican FRS differs in certain respects from U.S. GAAP. Note 21 to the audited consolidated financial statements provides a description of the principal differences between Mexican FRS and U.S. GAAP, as they relate to AMX, a reconciliation to U.S. GAAP of net income and total stockholders’ equity and cash flow statements for the years ended 2008 and 2007 under U.S. GAAP.

Under Mexican FRS, AMX’s financial statements for periods ending prior to January 1, 2008 recognized the effects of inflation on financial information. Inflation accounting under Mexican FRS had extensive effects on the presentation of AMX’s financial statements through 2007. See Note 2f to AMX’s audited consolidated financial statements.

Beginning with the year ended December 31, 2012, Mexican issuers with securities listed on a Mexican securities exchange will be required to prepare financial statements in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the International Accounting Standards Board (“IASB”). Issuers may voluntarily report using IFRS before the change in the reporting standards becomes mandatory. AMX plans to begin reporting financial statements in IFRS for the fiscal year ended December 31, 2010, although as of the date hereof it does not have any financial information available under the IFRS.

On December 13, 2006, AMX’s shareholders approved the merger of América Telecom, S.A.B. de C.V., or “Amtel,” AMX’s then controlling shareholder, and its subsidiary Corporativo Empresarial de Comunicaciones, S.A. de C.V., or “Corporativo,” with AMX. As a result of the merger, AMX assumed assets and liabilities based on Amtel’s unaudited financial statements as of October 31, 2006. In accordance with Mexican FRS, the merger with Amtel has been accounted for on a historical basis similar to a pooling of interest basis and AMX has adjusted its financial information and selected financial information presented in this Disclosure Statement to include the consolidated assets, liabilities and results of operations of Amtel for periods presented up to December 31, 2006.

The selected financial and operating information set forth below has been derived in part from AMX’s audited consolidated financial statements, which have been reported on by Mancera S.C., a Member Practice of Ernst & Young Global, an independent registered public accounting firm. The selected financial and operating information should be read in conjunction with, and is qualified in its entirety by reference to, AMX’s audited consolidated financial statements and the Notes thereto incorporated by reference in Form F-4.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

     As of and for the year ended December 31,(1)
     2005(10)(12)     2006(10)(12)     2007(10)(11)(12)     2008(10)(12)     2009(10)
     (2009 and 2008 in millions of Mexican pesos, previous years in millions
of constant Mexican Pesos as of December 31, 2007, except the per share and
number of shares data)(2)

Income Statement Data:

          

Mexican FRS

          

Operating revenues

   Ps. 196,638      Ps. 243,005      Ps. 311,580      Ps. 345,655      Ps. 394,711

Operating costs and expenses

   159,928      181,971      226,386      250,109      290,502

Depreciation and amortization

   22,955      27,884      40,406      41,767      53,082

Operating income

   36,710      61,034      85,194      95,546      104,209

Comprehensive financing income) cost

   2,790      28      387      13,865      2,982

Net income

   33,127      44,509      58,697      59,575      76,998

Earnings per share:

          

Basic(3)

   0.92      1.25      1.67      1.74      2.35

Diluted(3)

   0.92      1.25      1.67      1.74      2.35

Dividends declared per share(4)

   0.37      0.10      1.20      0.26      0.80

Dividends paid per share(5)

   0.37      0.12      1.20      0.26      0.80

Weighted average number of shares outstanding (millions)(6):

          

Basic

   35,766      35,459      35,149      34,220      32,738

Diluted

   35,766      35,459      35,149      34,220      32,738

U.S. GAAP

          

Operating revenues(7)

   Ps. 183,417      Ps. 231,509      Ps. 299,335      Ps. 330,712      Ps. 377,589

Operating costs and expenses

   149,415      172,170      220,294      237,737      275,392

Depreciation and amortization

   25,037      30,020      46,698      43,961      55,139

Operating income

   34,002      59,339      79,041      92,975      102,197

Comprehensive financing (income) cost

   (140   (1,084   (267   19,629      2,864

Net income

   33,102      40,726      55,529      54,252      74,360

Earnings per share:

          

Basic(3)

   0.92      1.15      1.58      1.58      2.27

Diluted(3)

   0.92      1.15      1.58      1.58      2.27

Balance Sheet Data:

          

Mexican FRS

          

Property, plant and equipment, net

   Ps. 120,734      Ps. 143,090      Ps. 167,084      Ps. 209,897      Ps. 227,049

Total assets

   249,171      328,325      349,121      435,455      453,008

Short-term debt and current portion of long-term debt

   22,176      26,214      19,953      26,731      9,168

Long-term debt

   68,346      89,038      84,799      116,755      101,741

Total shareholders’ equity(8)

   77,909      113,747      126,858      144,925      177,906

Capital stock

   36,565      36,555      36,552      36,532      36,524

Number of outstanding shares (millions)(6)(9)

          

AA Shares

   10,915      10,859      11,712      11,712      11,712

A Shares

   761      571      547      480      451

L Shares

   23,967      23,872      22,638      21,058      20,121

U.S. GAAP

          

Property, plant and equipment, net

   Ps. 136,871      Ps. 156,449      Ps. 177,424      Ps. 212,264      Ps. 227,349

Total assets

   268,479      349,564      363,075      443,544      459,164

Short-term debt and current portion of long-term debt

   22,176      26,213      19,953      26,731      9,168

Long-term debt

   68,346      89,037      84,799      116,755      101,741

Capital stock

   37,026      37,017      37,014      36,994      36,986

Total shareholders’ equity

   Ps. 93,359      Ps. 125,593      Ps. 137,660      Ps. 151,895      Ps. 190,051

Subscriber Data:

          

Number of subscribers (in thousands)

   93,329      124,776      157,287      186,568      204,761

Subscriber growth

   52.70   33.70   23.20   18.60   9.8

 

(1) In accordance with Mexican FRS, the merger with Amtel has been accounted for on a historical basis similar to a pooling of interest basis and AMX has adjusted its financial information and selected financial information presented in this prospectus to include the consolidated assets, liabilities and results of operations of Amtel for periods presented up to December 31, 2006.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

(2) Except per share, share capital and subscriber data.
(3) AMX has not included earnings or dividends on a per ADS basis. Each AMX L ADS represents 20 AMX L Shares and each AMX A ADS represents 20 AMX A Shares.
(4) Nominal amounts. Figures provided represent the annual dividend declared at the general shareholders’ meeting and for 2005 and 2007 include special dividends of Ps. 0.30 per share and Ps. 1.0 per share, respectively.
(5) Nominal amounts (except for 2009). For more information on dividends paid per share translated into U.S. dollars, see “Financial Information—Dividends” in the América Móvil 2008 Form 20-F. Amount in U.S. dollars translated at the exchange rate on each of the respective payment dates.
(6) All L Share figures have been adjusted retroactively to reflect a reduction in AMX L Shares as a result of AMX’s merger with Amtel. The increase in América Móvil Series AA shares (“AMX AA Shares”) between 2006 and 2007 was due to the exchange of shares of Amtel for our shares in connection with AMX’s merger with Amtel. Subject to certain restrictions, the shareholders of Amtel were free to elect to receive AMX L Shares or AMX AA Shares.
(7) The differences between AMX’s Mexican FRS and U.S. GAAP operating revenues include the reclassification of (1) the application of EITF 01-9, “Accounting Consideration Given by a Vendor to a Customer,” which AMX has applied to all periods presented in this table and which resulted in a reclassification of certain commissions paid to distributors from commercial, administrative and general expenses under Mexican FRS to reductions in operating revenues under U.S. GAAP, and (2) the application of EITF 00-21, “Accounting for Revenue Arrangements with Multiple Deliverables,” which addresses certain aspects of accounting for sales that involved multiple revenue generating products and/or services sold under a single contractual agreement. See Note 21 to AMX’s audited consolidated financial statements.
(8) Includes non-controlling interest.
(9) As of year-end.
(10) Note 2z.3 to AMX’s audited consolidated financial statements describes new accounting pronouncements under Mexican FRS that came into force in 2008 and 2009. The pronouncements that became effective on January 1, 2008 and 2009, were fully implemented in the financial statements included in this prospectus. These new accounting pronouncements were applied on a prospective basis. As a result, the financial statements of prior years, which are presented for comparative purposes, have not been modified and may not be comparable to AMX’s financial statements for 2008 and 2009.
(11) Beginning in 2007, AMX capitalizes interest under Mexican FRS.
(12) Net income and shareholder’s equity information for prior years was retrospectively adjusted for presentation and disclosure purposes, in accordance with amendments to Accounting Standards Codification (ASC) 810, Consolidation. ASC 810 states that a non-controlling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements, and requires consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the non-controlling interest.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

TELINT’s Selected Consolidated Financial Data

Form F-4 incorporates by reference the audited consolidated financial statements of TELINT as of December 31, 2009 and 2008 and for the years ended December 31, 2009, 2008 and 2007. TELINT’s audited consolidated financial statements have been prepared in accordance with Mexican FRS, which differ in certain respects from U.S. GAAP. Note 19 to TELINT’s audited consolidated financial statements provides a description of the principal differences between Mexican FRS and U.S. GAAP, as they relate to it; a reconciliation to U.S. GAAP of net income and total stockholders’ equity; and condensed financial statements under U.S. GAAP.

Due to the adoption of Mexican FRS B-10, effective January 1, 2008, TELINT ceased to recognize the effects of inflation on its financial information. Prior to 2008, inflation accounting had extensive effects on the presentation of TELINT’s financial statements. TELINT’s financial information for periods prior to December 31, 2007 is presented in constant pesos as of December 31, 2007, while its financial information for 2009 and 2008 is presented in nominal pesos. See Note 2(c) to TELINT’s audited consolidated financial statements. In TELINT’s financial information for 2009 and 2008, inflation adjustments for prior periods have not been removed from stockholders’ equity, and the re-expressed amounts for non-monetary assets at December 31, 2007 became the accounting basis for those assets beginning on January 1, 2008 and for subsequent periods, as required by Mexican FRS.

TELINT was established on December 26, 2007, pursuant to a procedure under Mexican law called an escisión, or the Escisión, which spun off the Latin American and yellow pages businesses of TELMEX. The audited consolidated financial statements and the summary financial data provided below for the dates and periods prior to the effective date of the Escisión, which was December 26, 2007, under Mexican FRS, include the historical operations of the entities transferred by TELMEX to TELINT in the Escisión that established TELINT. See Note 1 to TELINT’s audited consolidated financial statements.

The selected consolidated financial data set forth below have been derived from TELINT’s audited consolidated financial statements for each of the five years in the period ended December 31, 2009, which have been reported on by Mancera, S.C., a Member Practice of Ernst & Young Global, an independent registered public accounting firm. The selected consolidated financial data should be read in conjunction with, and are qualified in their entirety by reference to, TELINT’s audited consolidated financial statements and notes thereto included herein by reference to Form F-4.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

     Year ended December 31,
     2005    2006(2)    2007    2008(1)    2009(1)
    

(2009 and 2008 in millions of Mexican pesos; previous years in millions

of constant Mexican pesos as of December 31, 2007, except share and

per share data)

Income Statement Data:

              

Mexican FRS:

              

Operating revenues

   Ps. 61,346    Ps. 65,520    Ps. 67,760    Ps. 76,005    Ps. 92,540

Operating costs and expenses

   54,177    62,204    57,430    67,082    81,488

Operating income

   7,169    3,316    10,330    8,923    11,052

Net income

   4,586    3,018    7,014    5,631    9,563

Majority interest

   3,180    2,353    6,464    5,535    9,105

Earnings per share(3)

   0.14    0.11    0.33    0.30    0.50

Weighted average number of shares outstanding (millions)

   22,893    20,948    19,766    18,596    18,157

U.S. GAAP:

              

Operating revenues

   Ps. 46,349    Ps. 53,924    Ps. 67,760    Ps. 76,005    Ps. 92,540

Operating costs and expenses

   41,169    51,641    58,172    67,716    82,313

Operating income

   5,180    2,283    9,588    8,288    10,227

Net income(4)

   2,955    1,702    5,739    3,277    8,587

Earnings per share(3)

   0.13    0.08    0.29    0.18    0.46

Dividends per share(5)

   —      —      —      0.15    0.17

Balance Sheet Data:

              

Mexican FRS:

              

Plant, property and equipment, net

   Ps. 44,198    Ps. 47,271    Ps. 50,494    Ps. 58,479    Ps. 80,124

Total assets

   94,119    108,181    129,281    131,513    174,301

Short-term debt and current portion of long-term debt

   1,711    4,932    4,713    14,728    12,667

Long-term debt

   9,196    12,558    11,269    10,895    21,130

Total stockholders’ equity

   61,898    61,697    85,534    80,125    99,485

Capital stock

   —      —      17,829    17,173    16,978

U.S. GAAP:

              

Plant, property and equipment, net

   Ps. 34,657    Ps. 42,053    Ps. 58,672    Ps. 65,349    Ps. 88,449

Total assets

   67,470    89,340    136,177    135,141    186,841

Short-term debt and current portion of long-term debt

   1,711    4,932    4,713    14,728    12,667

Long-term debt

   6,645    9,923    10,855    10,411    20,677

Total stockholders’ equity(4)

   44,504    51,956    91,563    85,837    111,948

Capital stock

   —      —      17,829    17,173    16,978

 

(1) New accounting pronouncements under Mexican FRS that became effective in 2009 and 2008 were applied on a prospective basis. As a result, the financial statements of prior years, which are presented for comparative purposes, have not been modified and may not be comparable to our financial statements for 2009 and 2008.
(2) TELINT’s results of operations in 2006 were affected by several items relating to Brazilian tax proceedings. Under commercial, general and administrative costs, TELINT recorded (a) a charge of Ps. 4,210 million related to Embratel’s settlement of a dispute over Embratel’s liability for value added tax and (b) a provision of Ps. 1,467 million for penalties and monetary correction related to income tax on incoming international long distance service. Under other expenses (income), net TELINT recorded (a) other income of Ps. 3,919 million representing the monetary gain and accrued interest related to taxes Embratel paid between 1990 and 1994 and became entitled to recover in 2006 and (b) other expenses of Ps. 1,862 million representing the monetary gain and interest accrued related to back income tax Embratel was required to pay in 2006 on incoming international long distance service for prior periods.
(3) Based on the weighted average numbers of shares of TELMEX in 2007 and prior years. TELINT has not presented net income on a per ADS basis. Each TII L ADS represents 20 TII L Shares, and each TII A ADS represents 20 TII A Shares.
(4) Information for prior years was retrospectively adjusted for presentation and disclosure purposes, in accordance with amendments to Accounting Standards Codification (ASC) 810, Consolidation. See Note 19 to TELINT’s audited consolidated financial statements. ASC 810 states that a non-controlling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements, and requires consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the non-controlling interest.
(5) The dividend of Ps. 0.15 per share declared at the general shareholders meeting held in July 2008 was paid in equal installments of Ps. 0.075 per share. Holders of TII ADSs were paid a U.S. dollar equivalent of U.S.$0.144 per TII ADS in September 2008 and U.S.$0.111 per TII ADS in December 2008 (based on the exchange rate applicable on each payment date). The dividend of P.0.17 per share declared at the general shareholders’ meeting held in April 2007 was paid in equal installments of P.0.085 per share. Holders of TII ADSs were paid a U.S. dollar equivalent of U.S.$0.128 per TII ADS in August 2009 and U.S.$0.131 per TII ADS in November 2009 (based on the exchange rate applicable on each payment date).

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

Comparative Per Share Market Data

AMX announced the TELINT Offer and the TELECOM Offer on January 13, 2010 after the close of the trading markets. The following tables present the market value of the TELINT Shares and ADSs (on an historical and equivalent per share basis) and the market value of the AMX Shares and ADSs (on an historical basis) as of January 13, 2010 and April 23, 2010, the last trading date prior to this prospectus for which stock prices were available. Shareholders are urged to obtain current market information regarding the AMX Shares and the TELINT Shares. The market prices of these securities will fluctuate during the pendency of this offer and the Mexican Offer and thereafter, and may be different from the prices set forth below at the expiration of this offer and at the time you receive our shares. See “Market Information” for further information about historical market prices of TELINT Shares and ADSs and AMX Shares and ADSs.

The economic terms of the TELINT Offer and the TELECOM Offer were determined by us based on the average closing prices of the AMX L Shares, the TELINT L Shares and the Series L Shares of TELMEX (the “TMX L Shares”) on the BMV over the ten trading days ending at January 12, 2010, the day immediately prior to the announcement of AMX’s intention to make the offers. See “The Offers—Basis for Determination of the Consideration.”

TELINT L Shares and AMX L Shares

The following table presents the closing market prices per share as reported on the BMV for AMX L Shares and TELINT L Shares as of (1) January 13, 2010, and (2) April 23, 2010.

 

     TELINT
L Shares
   AMX
L Shares
   TELINT
L Shares
     Historical    Equivalent
Basis
     Shares    Shares    Shares

(a) January 13, 2010

   Ps. 11.40    Ps. 31.80    Ps. 11.86

(b) April 23, 2010

   11.80    31.40    11.71

The “equivalent basis stock price” of TELINT L Shares represents the applicable market price for AMX L Shares on the corresponding date, multiplied by the exchange ratio of 0.373 AMX L Shares for one TELINT L Share.

TELINT A Shares and AMX L Shares

The following table presents the closing market prices per share as reported on the BMV for the AMX L shares and TELINT A Shares as of (1) January 13, 2010, and (2) April 23, 2010.

 

     TELINT
A Shares
   AMX
L Shares
   TELINT
A Shares
     Historical    Equivalent
Basis
     Shares    Shares    Shares

(a) January 13, 2010

   Ps. 11.01    Ps. 31.80    Ps. 11.86

(b) April 23, 2010

   11.70    31.40    11.71

The “equivalent basis stock price” of TELINT A Shares represents the applicable market price for AMX L Shares on the corresponding date, multiplied by the exchange ratio of 0.373 AMX L Shares for one TELINT A Share.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

TELINT L ADSs and AMX L ADSs

The following table presents the closing market prices per share as reported on the NYSE for AMX L ADSs and for TELINT L ADSs as of (1) January 13, 2010, and (2) April 23, 2010.

 

     TELINT
L ADSs
   AMX
L ADSs
   TELINT
L ADSs
     Historical    Equivalent
Basis
     Shares    Shares    Shares

(a) January 13, 2010

   $ 17.85    $ 50.01    $ 18.65

(b) April 23, 2010

     19.41      51.57      19.24

The “equivalent basis stock price” of TELINT L ADSs represents the applicable market price for AMX L ADSs on the corresponding date, multiplied by the exchange ratio of 0.373 AMX L ADSs for one TELINT L ADSs.

TELINT A ADSs and AMX L ADSs

The following table presents the closing market prices per share as reported on the NYSE for AMX L ADSs and TELINT A ADSs as of (a) January 13, 2010, and (b) April 23, 2010.

 

     TELINT
A ADSs
   AMX
L ADSs
   TELINT
A ADSs
     Historical    Equivalent
Basis
     Shares    Shares    Shares

(a) January 13, 2010

   $ 17.82    $ 50.01    $ 18.65

(b) April 23, 2010

     19.08      51.57      19.24

The “equivalent basis stock price” of TELINT A ADSs, below, represents the applicable market price for AMX L ADSs on the corresponding date, multiplied by the exchange ratio of 0.373 AMX L ADSs for one TELINT A ADSs.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

Comparative Historical and Unaudited Pro Forma Per Share Data

The following comparative tables present historical and unaudited pro forma per share data and should be read in conjunction with the audited consolidated financial statements of each of AMX, TELINT and TELMEX, incorporated herein by reference to Form F-4, and with the Selected Unaudited Pro Forma Condensed Combined Financial Information included elsewhere in Form F-4. The following unaudited pro forma information has been prepared based upon the same assumptions used in the preparation of the Selected Unaudited Pro Forma Condensed Combined Financial Information. The following information should be read in conjunction with the audited consolidated financial statements of AMX and TELINT incorporated by reference into this Disclosure Statement and the unaudited pro forma condensed financial information included elsewhere in this Disclosure Statement. The unaudited pro forma financial information below is presented for illustrative purposes only and is not necessarily indicative of the results of operations or financial position that would have been achieved if the Offer had occurred on the dates indicated nor is it necessarily indicative of the future results of operations or financial position of the integrated companies.

The following tables present historical, unaudited pro forma and unaudited pro forma equivalent per share data under Mexican FRS and U.S. GAAP. The amounts presented reflect the following:

 

   

Because holders of TII Securities may elect to receive cash rather than AMX Securities, we cannot predict the dilutive effect of the TII Offer. In the table below we have assumed a share-for-share exchange with no cash being paid. For a range of prospective payments in cash that could have dilutive efforts, please refer to further discussion in Note 2(c) of the Unaudited Pro Forma Condensed Combined Financial Statements.

 

   

Pro-forma book value per share data assumes that both the TII Offer and the related CGT Offer occurred on December 31, 2009. Pro-forma earnings per share data and pro-forma dividend per share data assume that the TII Offer occurred on January 1, 2009, and the CGT Offer occurred on January 1, 2007. Refer to further discussion in Notes 1 and 4 of the Unaudited Pro Forma Condensed Combined Financial Statements.

 

   

Book value per share is computed by dividing total controlling interest shareholders’ equity by the number of historical shares outstanding at December 31, 2009. Pro-forma book value per share is computed by dividing total pro-forma controlling interest shareholders’ equity by the number of pro-forma shares outstanding at December 31, 2009. Refer to further discussion in Note 4 of the Unaudited Pro Forma Condensed Combined Financial Statements.

 

   

Dividends per share data are calculated by dividing total dividends per share paid by us by the total historical weighted average of number of shares outstanding during each year. Pro-forma dividends is calculated by dividing total dividends per share paid by AMX, TELINT and TELMEX by the total pro-forma weighted average of number of shares outstanding during each year. Refer to further discussion in Note 4 of the Unaudited Pro Forma Condensed Combined Financial Statements.

 

   

Equivalent basis information reflects historical amounts adjusted to reflect the applicable exchange ratios described in Note 1 of the Unaudited Pro Forma Condensed Combined Financial Statements.

 

   

The pro-forma combined columns reflect the effect of the CGT Offer (a common control transaction) [for all periods]. Because CGT does not prepare separate U.S. GAAP financial statements, a separate column for CGT historical amounts has not been presented below. Refer to further discussion in Note 3(d) to the Unaudited Pro Forma Condensed Combined Financial Statements. Year ended December 31, 2009.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

     For the year ended December 31, 2009
     AMX
Historical
   TELINT    Pro forma
combined, giving
effect to the Offer
and the TELECOM
Offer
        Historical    Equivalent   
     (in thousands of Ps.)

Mexican FRS

  

Earnings per share:

           

Basic

   Ps. 2.35    Ps. 0.50    Ps. 0.19    Ps. 2.27

Diluted

   2.35    0.50    0.19    2.27

Dividend per share

   0.79    0.17    0.06    0.74

Book value per share

   5.49    5.31    1.98    6.72

U.S. GAAP

           

Earnings per share

           

Basic

   2.27    0.46    0.17    2.11

Diluted

   2.27    0.46    0.17    2.11

Book value per share

   5.86    5.98    2.23    9.34

 

     For the year ended December 31, 2008
     AMX
Historical
   Pro forma combined, giving effect to the
Offer and the TELECOM Offer

Mexican FRS

     

Earnings per share:

     

Basic

   Ps. 1.74    Ps. 1.74

Diluted

   1.74    1.74

Dividend per share

   0.26    0.32

U.S. GAAP

     

Earnings per share:

     

Basic

   1.58    1.51

Diluted

   1.58    1.51
     For the year ended December 31, 2007
     AMX
Historical
   Pro forma combined, giving effect to the
Offer and the TELECOM Offer

Mexican FRS

     

Earnings per share:

     

Basic

   Ps. 1.67    Ps. 1.81

Diluted

   1.67    1.81

Dividend per share

   1.20    1.08

U.S. GAAP

     

Earnings per share:

     

Basic

   1.58    1.68

Diluted

   1.58    1.68

Selected Unaudited Pro Forma Condensed Combined Financial Information

The following table presents unaudited pro forma condensed combined financial information under Mexican FRS and U.S. GAAP, as indicated for the year ended December 31, 2009 for AMX, assuming the completion of the Offer and the TELECOM Offer. AMX is presenting the unaudited pro forma condensed combined financial information, prepared in accordance with Mexican GAAP and U.S. GAAP, to provide holders of TELINT Shares and ADSs with a picture of what the results of operations and financial position of the combined businesses of AMX, TELINT and TELECOM might have looked like had these exchange offers been completed on an earlier date. See “Unaudited Condensed Combined Financial Information” in Form F-4 for an explanation of the basis of preparation of these data, including the assumptions underlying them and the limitations thereof.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

     As of and for the Year Ended
December 31, 2009
     (Ps. thousands)

Balance Sheet Data

  

Mexican FRS

  

Total assets

   Ps. 820,614,060

Total capital stock

   302,729,500

Operating revenue

   578,474,099

Operating profit

   149,898,813

Net income

   105,435,829

U.S. GAAP

  

Total capital stock

   Ps. 420,519,993

Net income

   98,112,870

Fractional Entitlements

Fractions of AMX L Shares or AMX L ADSs will not be issued to persons whose TELINT Shares and ADSs are exchanged in the U.S. Offer.

Regulatory Matters

AMX will not be obligated to purchase or exchange any tendered TELINT Shares pursuant to the U.S. Offer if it has not obtained any waiver, consent, extension, approval, action or non-action from any governmental, public, judicial, legislative or regulatory authority or agency or other party which is necessary to consummate the Offer and the other transactions contemplated by AMX shall not have been obtained (or shall have expired or otherwise ceased to be in full force and effect), or any such consent, extension, approval, action or non-action contains terms and conditions or imposes any requirement, or any limitations on the participation by any shareholder in the Offer, in either case unacceptable to AMX, in its reasonable judgment.

Mexican Regulatory Matters

AMX has made all necessary filings for the approval of the TELECOM Offer and the TELINT Offer by Mexican regulators, including the Federal Economic Competition Commission (Comisión Federal de Competencia Económica or “Cofeco”). On February 11, 2010, Cofeco informed AMX that the Cofeco board unconditionally authorized AMX to carry out the TELECOM Offer and the TELINT Offer.

U.S. Regulatory Matters

The TELINT Offer is not subject to the notification requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”). However, the TELECOM Offer was subject to the notification requirements of the HSR Act. On February 23, 2010 the Pre-Merger Notification Office at the U.S. Federal Trade Commission granted an early termination of the HSR Act waiting period.

Although the Offer is not subject to the notification requirements of the HSR Act, the Department of Justice, Antitrust Division or the U.S. Federal Trade Commission frequently scrutinize the legality under the antitrust laws of transactions such as the Offer. At any time before or after delivery of AMX Shares in the Offer, the Antitrust Division or the FTC could take whatever action under the antitrust laws it deems necessary or desirable in the public interest, including seeking to enjoin the delivery of AMX shares pursuant to the Offer, seeking the divestiture of TELINT Shares acquired by AMX pursuant to the TELINT Offer or seeking the divestiture of substantial assets of TELINT or TELECOM. Private parties and state attorneys general may also bring legal action under federal or state antitrust laws under some circumstances. Based upon an examination of information available to AMX relating to the businesses in which it, TELINT, TELECOM and their respective subsidiaries are engaged, AMX believes that the Offer will not violate U.S. antitrust laws. Nevertheless, there can be no assurance that a challenge to the Offer on antitrust grounds will not be made or, if a challenge were made, what the result would be.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

In addition, TELECOM’s subsidiaries that hold licenses and authorizations from the U.S. Federal Communications Commission (“FCC”) must submit post-closing notifications to the FCC for the transfers of control resulting from the Offer and the TELECOM Offer. The FCC typically processes as a routine matter such “pro forma” transfer of control applications and notifications, i.e., applications and notifications relating to transactions in which the ultimate controlling shareholder does not change. Nevertheless, there can be no assurance that interested parties will not seek to oppose one or more of the submissions, or that the FCC will not raise questions about the Offer or the TELECOM Offer, and there can be no assurance as to the outcome of any such opposition or review.

Other Regulatory Matters

Several of AMX’s subsidiaries, including those operating in Brazil, Argentina, Peru and Ecuador, will be required to formally notify the relevant regulatory authorities after the consummation of the Offer and the TELECOM Offer.

Except as set forth above, AMX is unaware of any other material regulatory approvals or other regulatory actions required for the consummation of the Offer and the TELECOM Offer and the other transactions contemplated by AMX. Should any such approval or other action be required, AMX currently contemplates that such approval or other action will be sought. AMX is unable to predict whether such approval or other action may determine that we are required to delay the acceptance for exchange or purchase of TELINT Shares tendered pursuant to the Offer pending the outcome of any such matter. There can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that if such approvals were not obtained or such other actions were not taken adverse consequences might not result to TELINT’s business or certain parts of TELINT’s business might not have to be disposed of. Our obligation under the U.S. Offer to accept for payment or exchange and pay for shares is subject to the conditions as described above.

Material Relationships Among AMX, TELINT and AMX’s Executive Officers, Directors and Major Shareholders

According to reports of beneficial ownership of the AMX Shares filed with the SEC on March 1, 2010, the Slim Family may be deemed to control AMX through their beneficial ownership held by a trust and another entity and their direct ownership of shares.

The following table identifies each owner of more than 5% of any series of AMX Shares as of February 28, 2010. Except as described in the table below and the accompanying notes, AMX is not aware of any holder of more than 5% of any series of its shares. Figures below do not include the total number of AMX L Shares that would be held by each shareholder upon conversion of the maximum number of AMX AA Shares or AMX A Shares, as provided for under AMX’s bylaws.

 

     AA Shares(1)    A Shares(2)    L Shares(3)    AA and A
Shares as
a % of
Series(*)

Shareholder

   Shares
Owned
(millions)
   Percent
of
Class
   Shares
Owned
(millions)
   Percent
of
Class
   Shares
Owned
(millions)
   Percent
of
Class
  

Control Trust.(4)

   5,446    46.5    —      —      —      —      44.7

AT&T Inc.(5)

   2,869    24.5    —      —      —      —      23.5

Inmobiliaria Carso(6)

   696    5.9    —      —      —      —      5.7

 

(*) The AMX AA Shares and AMX A Shares are entitled to elect together a majority of AMX’s directors. Percentage figures for each shareholder are based on the number of shares outstanding as of the date of its most recently filed beneficial ownership report.
(1) As of February 28, 2010, there were 11,712 million AMX AA Shares outstanding, representing 96.3% of the total full voting shares (AMX A Shares and AMX AA Shares).
(2) As of February 28, 2010, there were 449 million AMX A Shares outstanding, representing 3.6% of the total full voting shares (AMX A Shares and AMX AA Shares).
(3) As of February 28, 2010, there were 20,032 million AMX L Shares outstanding.
(4)

Based on beneficial ownership reports filed with the SEC on March 1, 2010, the “Control Trust” is a Mexican trust, which directly holds AMX AA Shares for the benefit of the members of the Slim Family. Members of the Slim Family, including Carlos Slim Helú, directly own an aggregate of 1,779,218,535 AMX AA Shares and 2,469,735,195 AMX L Shares, representing 15.19% and 12.28%, respectively, of each series and 14.62% of the combined AMX A Shares and AMX AA Shares. According to such reports, none of these members of the Slim Family individually directly own more than 5% of any of AMX’s shares.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

  According to reports of beneficial ownership of shares filed with the SEC on March 1, 2010, the Slim Family may be deemed to control AMX through their beneficial ownership of shares held by the Control Trust and Inmobiliaria Carso (defined below) and their direct ownership of shares. Percentage figures are based on the number of shares outstanding as of the date of the most recently filed beneficial ownership report.
(5) Based on beneficial ownership reports filed with the SEC on June 20, 2008. In accordance with Mexican law and AMX’s bylaws, AT&T holds its AMX AA Shares through a Mexican trust. Percentage figures are based on the number of shares outstanding as of the date of the most recently filed beneficial ownership report.
(6) Inmobiliaria Carso, S.A. de C.V. is a sociedad anónima de capital variable organized under the laws of Mexico. Inmobiliaria Carso is a real estate holding company. The Slim Family beneficially owns, directly or indirectly, a majority of the outstanding voting equity securities of Inmobiliaria Carso. The Slim Family may be deemed to control AMX through their beneficial ownership held by the Control Trust and Inmobiliaria Carso and their direct ownership of shares. Percentage figures are based on the number of shares outstanding as of the date of the most recently filed beneficial ownership report.

According to beneficial ownership reports filed with the SEC on March 1, 2010, Carlos Slim Helú is the beneficial owner of 433 million of AMX AA Shares and 264 million of AMX L Shares directly, and his son and chairman of AMX’s Board of Directors, Patrick Slim Domit, is the beneficial owner of 444 million AMX AA Shares and 516 million of AMX L Shares directly. In addition, according to beneficial ownership reports filed with the SEC, Carlos Slim Helú, together with his sons and daughters, including Patrick Slim Domit, may be deemed to control AMX through their beneficial ownership held by a trust and another entity and their direct ownership of shares.

[Except as described above, according to the ownership reports of shares or other securities or rights in AMX’s shares prepared by AMX’s directors and members of senior management and provided to AMX, none of AMX’s directors or executive officers is the beneficial owner of more than 1% of any class of AMX’s capital stock. Directors and members of senior management are requested to provide ownership information of shares of AMX or other securities or rights in AMX’s shares on a yearly basis.]

TELINT’s Major Shareholders

As of February 28, 2010, the TELINT AA Shares represented 45.1% of the total capital stock and 95.3% of the combined TELINT AA Shares and TELINT A Shares, which together are entitled to elect a majority of TELINT’s directors. The TELINT AA Shares are owned by (a) TELECOM, (b) AT&T International and (c) various other Mexican investors. According to reports of beneficial ownership of TELINT Shares filed with the SEC on January 27, 2010, TELECOM made be deemed to control TELINT.

The following table identifies owners of more than five percent of any class of TELINT Shares, based on shares outstanding as of February 28, 2010. Except as described below, AMX is not aware of any holder of more than five percent of any class of TELINT Shares.

 

     AA Shares(1)     A Shares(2)     L Shares(3)     Combined
A Shares
and AA
Shares(*)
 
     Shares
(millions)
   Percent
of class
    Shares
(millions)
   Percent
of class
    Shares
(millions)
   Percent
of class
   

Carso Global Telecom(4)(5)

   6,000    73.9   92    23.3   4,845    50.9   71.6

AT&T International(4)

   1,799.5    22.2      —      —        —      —        21.1   

 

(*) The TELINT AA Shares and TELINT A Shares are entitled to elect together a majority of TELINT’s directors. Percentage figures for each shareholder are based on the number of shares outstanding as of the date of its most recently filed beneficial ownership report.
(1) As of February 28, 2010, there were 8,115 million TELINT AA Shares outstanding, representing 95.3% of the combined TELINT A Shares and TELINT AA Shares.
(2) As of February 28, 2010, there were 394 million TELINT A Shares outstanding, representing 6.5% of the combined TELINT A Shares and TELINT AA Shares.
(3) As of February 28, 2010, there were 9,503 million TELINT L Shares outstanding.
(4) Holders of TELINT A Shares and TELINT AA Shares are entitled to convert a portion of these Shares to TELINT L Shares, subject to the restrictions set forth in the bylaws.
(5) Derived from reports of beneficial ownership filed with the SEC.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

The following table sets forth the share ownership, as of February 28, 2010, of TELINT’s officers and directors who own more than one percent of any class of the capital stock. Carlos Slim Domit (chairman of the board of directors) may be deemed to have beneficial ownership of 6,000 million TELINT AA Shares, 92 million TELINT A Shares, and 4,845 million TELINT L Shares held by TELECOM and other companies that are under common control with us. Except as described below, we are not aware of any director, alternate director or executive officer who holds more than one percent of any class of its shares.

 

     AA Shares(1)     A Shares(1)     L Shares(1)     Combined
A Shares

of voting
shares(2)
 
     Shares
(millions)
   Percent
of class
    Shares
(millions)
   and AA
Shares(*)
    Shares
(millions)
   Percent
of class
   

Carlos Slim Domit(3)

   6,000    73.9   92.7    23.3   4,845    50.9   71.6

 

(1) Holders of TELINT AA Shares and TELINT A Shares are entitled to convert a portion of these Shares to TELINT L Shares, subject to the restrictions set forth in our bylaws. Based on reports of beneficial ownership filed with the SEC, 4,512,225,770 TELINT AA Shares and all TELINT A Shares, of which Carlos Slim Domit may be deemed to share beneficial ownership, could be converted to TELINT L Shares.
(2) TELINT AA Shares and TELINT A Shares.
(3) Includes 9,516,264 TELINT L Shares owned directly by Carlos Slim Domit.

According to beneficial ownership and other reports prepared by the directors and executive officers for submission to AMX, in the last 60 days no director or executive officer has engaged in any transaction with respect to the TELINT Shares.

Management Services

Each of TELMEX and TELINT has a management services agreement with TELECOM for calendar 2010, under which TELECOM provides management, consulting and other similar services. Each agreement provides for TELECOM to receive an annual fee of U.S.$22.5 million. AMX does not currently have such an agreement with TELECOM, though it did through 2006.

AMX has an agreement with a subsidiary of AT&T under which that subsidiary provides consulting services and the parties negotiate compensation annually. AMX has paid U.S.$7.5 million in fees each year from 2007 through 2009 and expects to agree on the same price for 2010. TELMEX and TELINT each had a similar agreement with certain subsidiaries of AT&T in 2009. AT&T’s subsidiaries have continued to provide services to TELINT and TELMEX into 2010 and are planning to review and/or extend such agreements in the near future.

Shareholder Agreements

AMX

AMX’s former controlling shareholder, Amtel, and a subsidiary of AT&T, as successors of TELECOM and SBC International, Inc., respectively, were parties to an agreement relating to their ownership of AMX AA Shares. Among other things, the agreement subjects certain transfers of AMX AA Shares by either party to a right of first offer in favor of the other party. The right of first offer does not apply to the conversion of AMX AA Shares to AMX L Shares or the subsequent transfer of AMX L Shares. The agreement also provides for the composition of the Board of Directors and the Executive Committee and for each party to enter into a management services agreement with AMX. The AMX L Shares that AT&T will acquire in the TELINT Offer will not be subject to the agreement.

According to reports of beneficial ownership of AMX shares filed with the SEC, the Slim Family and the control trust (the “Control Trust”) expect to enter into amendments of the agreement with AT&T pursuant to which the Slim Family and the Control Trust will succeed to the rights and obligations of Amtel.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

TELMEX

A subsidiary of AT&T and TELECOM have a shareholders’ agreement relating to their ownership of TMX AA Shares, which among other things subjects certain transfers of TMX AA Shares by either party to a right of first offer in favor of the other party and provides for the composition of the board of directors and executive committee of TELMEX.

TELINT

TELINT was established in a spin-off from TELMEX in 2007. Following the spin-off, AT&T and TELECOM have continued to conduct themselves as though the existing shareholders agreement relating to TELMEX also applies to TELINT. Though they have not entered into a new agreement relating to TELINT, they have stated that they expect to enter into such an agreement. Following the completion of the TELINT Offer, however, AMX does not expect that such an agreement will be necessary.

Related Party Transactions—Transactions with TELMEX, TELINT and Subsidiaries

AMX has, and expects to continue to have, a variety of contractual relationships with TELMEX, TELINT and their subsidiaries, including some of their international subsidiaries.

According to beneficial ownership reports filed with the SEC, TELMEX and TELINT may be deemed to be under common control with AMX.

Ongoing Commercial Relationships

Because both AMX, on the one hand, and TELMEX or TELINT, on the other hand, provide telecommunications services in some of the same geographical markets, they have extensive operational relationships. These relationships include interconnection between their respective networks; use of facilities, particularly for our lease of premises owned by TELMEX and the co-location of equipment in such premises; use of their private circuits; the provision of long distance services to their customers; and use of each other’s services. The most significant of these relationships are between Radiomóvil Dispa, S.A. de C.V. (“Telcel”) and TELMEX in Mexico and between our Brazilian subsidiaries and Embratel Participações S.A. (“Embratel”), a subsidiary of TELINT that mainly provides fixed-line telecommunication services, in Brazil. Many of the agreements and arrangements are also subject to specific regulations governing telecommunications services. These relationships are subject to a variety of different agreements, which contain terms generally similar to those on which each company does business with unaffiliated parties.

These operational relationships are material to AMX’s financial performance. In 2009, Ps. 18,070 million of AMX’s total operating revenues were attributable to interconnection with TELMEX and its subsidiaries, primarily representing payments under the calling party pays system arising from fixed-to-mobile calls. AMX had Ps. 274,481 million in accounts receivable from TELMEX and certain of its subsidiaries. AMX had Ps. 25,628 million in accounts receivable from TELINT and certain of its subsidiaries, and accounts payable of Ps. 615,804 million to TELINT and certain of its subsidiaries at December 31, 2009. Also in 2009, Ps. 7,218 million of AMX’s cost of services was attributable to payments to TELMEX and its subsidiaries, primarily representing interconnection payments for long-distance calls carried by TELMEX or its subsidiaries and use of facilities under leases and collocation agreements with TELMEX or its subsidiaries.

In the ordinary course of business, AMX’s subsidiaries in Brazil lease real property from Embratel. The aggregate amount of consideration paid for these leases is approximately R$1.2 million on an annual basis. AMX may, from time to time, lease additional real estate from Embratel.

TELMEX distributes Telcel handsets and prepaid cards on commercial terms, and Embratel provides call center services to the operating subsidiaries of Claro Participações S.A.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

Other Commercial Relationships

In 2005, TELMEX Argentina, S.A., a subsidiary of TELINT, and AMX Argentina, S.A. entered into an agreement for the construction of approximately 1,943 kilometers of fiber optic transmission lines in Argentina. The project concluded in 2009, representing a total cost of approximately Ps. 313 million (U.S. $24 million based upon the exchange rate in effect as of December 31, 2009).

In 2005, AMX’s subsidiary, Claro Chile, S.A. and TELMEX Chile Holding, S.A. (“TELMEX Chile”), a subsidiary of TELINT, entered into an agreement for the provision of capacity and infrastructure by TELMEX Chile for a period of 20 years. Pursuant to the agreement, Claro Chile pays a monthly disbursement of U.S.$17.5 million (Ps. 190.0 million based upon the exchange rate in effect as of December 31, 2009). The amount recorded in the results of operations as of December 31, 2009 for this agreement was U.S.$210 million. (Ps. 2,743 million based upon the exchange rate in effect as of December 31, 2009).

In November 2005, Embratel entered into an agreement with Claro Participações to provide backbone network capacity to our operating subsidiaries in Brazil for a period of 20 years. Pursuant to this agreement AMX’s subsidiaries in Brazil are required to pay Embratel a monthly fee that ranges between R$4.0 million and R$6.0 million (Ps. 24.5 million and Ps. 36.8 million, respectively, based upon the exchange rate in effect as of December 31, 2009), depending on the capacity provided under the agreement.

In 2006, TELMEX Perú S.A., a subsidiary of TELINT, and América Móvil Perú, S.A.C., entered into a turnkey fiber optic network construction agreement in order to jointly build a fiber optic network along the coast of Peru of 2,823 kilometers for approximately Ps. 561 million (U.S.$43 million based upon the exchange rate in effect as of December 31, 2009). The construction was awarded through a private bidding process to our affiliates Carso Infraestructura y Construcción, S.A. de C.V. (“CICSA”) and Grupo Condumex, S.A. de C.V. The project concluded in November 2009.

In 2009, AMX Argentina began the construction of approximately 3,100 kilometers of fiber optic transmission lines in southern Argentina. The construction work and cable are valued at Ps. 503 million (U.S.$39.0 million based upon the exchange rate in effect as of December 31, 2009). Once the work is finalized, we expect that AMX Argentina will enter into a 30-year license for use agreement with TELMEX Argentina, a subsidiary of TELINT. Additionally, TELINT transferred to us the rights to use for 15 years the fiber optic ring serving the Buenos Aires metropolitan area (commonly known in Argentina as the AMBA), which covers most of the urban links of the greater Buenos Aires area (commonly known in Argentina as Gran Buenos Aires) with an approximate value of Ps. 2,100 million (US$160 million based upon the exchange rate in effect as of December 31, 2009).

The terms of these agreements are generally similar to those on which each company does business with unaffiliated parties.

Other Transactions

From time to time, AMX makes investments together with affiliated companies and sell or buy investments to or from affiliated companies. AMX has pursued joint investments in the telecommunications industry with TELMEX.

Transactions Between TELMEX and TELINT

In 2009, TELINT, through its subsidiaries, paid Ps. 997,231 (Ps. 1,479,216 in 2008 and Ps. 494,948 in 2007) to TELMEX for services related to the yellow pages business, which include billing and collections and other administrative services, as well as an arrangement whereby TELINT has access to TELMEX’s customer database for agreed fees.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

Unaudited Pro Forma Condensed Combined Financial Information

See Exhibit 26(d) to this Disclosure Statement.

Information About AMX

AMX is the largest provider of wireless communications services in Latin America based on subscribers. As of December 31, 2009, we had 201.0 million wireless subscribers in 18 countries, compared to 182.7 million at year-end 2008. Because our focus is on Latin America, a substantial majority of our wireless subscribers are prepaid customers. We also had an aggregate of approximately 3.8 million fixed lines in Central America and the Caribbean as of December 31, 2009, making us the largest fixed-line operator in Central America and the Caribbean based on the number of subscribers.

Our principal operations are:

 

   

Mexico. Through Radiomóvil Dipsa, S.A. de C.V., which operates under the name “Telcel,” we provide mobile telecommunications service in all nine regions in Mexico. As of December 31, 2009, we had 59.2 million subscribers in Mexico. We are the largest provider of mobile telecommunications services in Mexico.

 

   

Brazil. With approximately 44.4 million subscribers as of December 31, 2009, we are one of the three largest providers of wireless telecommunications services in Brazil based on the number of subscribers. We operate in Brazil through our subsidiaries, Claro S.A. and Americel S.A., or “Americel,” under the unified brand name “Claro.” Our network covers the main cities in Brazil (including São Paulo and Rio de Janeiro).

 

   

Southern Cone. We provide wireless services in Argentina, Paraguay, Uruguay and Chile. As of December 31, 2009, we had 21.8 million subscribers in the Southern Cone region. We operate under the “Claro” brand in the region.

 

   

Colombia and Panama. We provide wireless services in Colombia under the “Comcel” brand. As of December 31, 2009, we had 27.7 million wireless subscribers and were the largest wireless provider in Colombia. We began providing wireless services in Panama in March 2009.

 

   

Andean Region. We provide wireless services in Peru and Ecuador. As of December 31, 2009, we had 17.8 million subscribers in the Andean region. We operate under the “Porta” brand in Ecuador and under the “Claro” brand in Peru.

 

   

Central America. We provide fixed-line and wireless services in Guatemala, El Salvador, Honduras and Nicaragua. Our Central American subsidiaries provide wireless services under the “Claro” brand. As of December 31, 2009, our subsidiaries had 9.6 million wireless subscribers, over 2.2 million fixed-line subscribers in Central America and 0.3 million broadband subscribers.

 

   

United States. Our U.S. subsidiary, TracFone Wireless Inc., or “TracFone,” is engaged in the sale and distribution of prepaid wireless services and wireless phones throughout the United States, Puerto Rico and the U.S. Virgin Islands. It had approximately 14.4 million subscribers as of December 31, 2009.

 

   

Caribbean. Compañía Dominicana de Teléfonos, C. por A., or “Codetel,” is the largest telecommunications service provider in the Dominican Republic with 4.8 million wireless subscribers, 0.8 million fixed-line subscribers and 0.2 million broadband subscribers as of December 31, 2009. We provide fixed-line and broadband services in the Dominican Republic under the “Codetel” brand and wireless services under the “Claro” brand.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

   

Puerto Rico. Telecomunicaciones de Puerto Rico, Inc., or “TELPRI,” through its subsidiaries, is the largest telecommunications service provider in Puerto Rico with approximately 0.8 million fixed-line subscribers, 0.8 million wireless subscribers and 0.2 million broadband subscribers as of December 31, 2009. We provide fixed-line and broadband services in Puerto Rico under the “PRT” brand and wireless services under the “Claro” brand.

 

   

Jamaica. Oceanic Digital Jamaica Limited, or “Oceanic,” provides wireless and value added services throughout Jamaica, with 0.4 million wireless subscribers as of December 31, 2009.

AMX is a sociedad anónima bursátil de capital variable organized under the laws of Mexico with our principal executive offices at Lago Alberto 366, Edificio Telcel I, Colonia Anáhuac, Delegación Miguel Hidalgo, 11320, México D.F., México. Our telephone number at this location is (5255) 2581-4449.

Recent Developments

Regulatory Matters

In November 2008, Cofeco issued a preliminary report (dictamen preliminar) finding that Telcel has substantial market power in the national mobile telephone services relevant market. The preliminary report was confirmed by the publication on February 10, 2010 of the relevant findings of a resolution relating to the existence of substantial market power. In February 2010, Telcel filed an administrative proceeding (recurso administrativo de reconsideración) before Cofeco. When this administrative proceeding was rejected by Cofeco for analysis, Telcel filed an appeal (amparo indirecto) before an administrative judge against the rejection of the proceeding and against the issuance, subscription and publication of the February 10, 2010 resolution. Under the Antitrust Law (Ley Federal de Competencia Económica) and the Telecommunications Law (Ley Federal de Telecomunicaciones), if Cofeco makes a final finding of substantial market power concerning an operator, Cofetel can impose on that operator specific regulations with respect to tariffs, quality of service and information. We cannot predict what regulatory steps Cofetel may take in response to determinations by Cofeco.

In September 2009, the CRT issued a series of resolutions stating that our Colombian subsidiary, Comcel, has a dominant position in Colombia’s market for outgoing mobile services. Under Colombian law, a market participant is considered to have a dominant position in a specified market if the regulators determine that it has the capacity to control the conditions in that market. The CRT made its determination based on Comcel’s traffic, revenues and subscriber base. The resolutions also included regulations requiring Comcel to charge rates (excluding access fees) for mobile-to-mobile calls outside the Comcel network (“off net”) that are no higher than the fees charged for mobile-to-mobile calls within the Comcel network (“on net”) plus access fees. The regulations were first implemented in December 4, 2009. These regulations will limit our flexibility in offering pricing plans to our customers, but we cannot predict the effects on our financial performance.

See Note 15 to our audited consolidated financial statements for a description of our material legal proceedings.

Tax on Telecommunications Services

Effective January 1, 2010, the Mexican government imposed a new tax of 3% on certain telecommunication services we provide. Customers of those telecommunication services are responsible for the payment of this new tax. Telcel has filed legal proceedings against this new tax. We cannot predict the medium- to long-term effects of this new tax on our financial performance.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

Information About TELINT

TELINT is a Mexican holding company, providing through its subsidiaries in Brazil, Colombia, Argentina, Chile, Peru and Ecuador, a wide range of telecommunications services, including voice, data and video transmission, Internet access and integrated telecommunications solutions; pay cable and satellite television; and print and Internet-based yellow pages directories in Mexico, the United States, Argentina, Peru and Colombia.

TELINT’s principal business is in Brazil, which accounts for nearly 80% of its total revenues. TELINT operates in Brazil through Embratel Participações S.A. and its subsidiaries. Throughout this prospectus, we refer to Embratel Participações S.A. and, where the context requires, its consolidated subsidiaries, as Embratel.

The following is a summary of TELINT’s business by geographic market:

 

   

Brazil. Through Embratel, TELINT is one of the leading providers of telecommunications services in Brazil. Its principal service offerings in Brazil include domestic and international long-distance, local telephone service, data transmission, direct-to-home (DTH) satellite television services and other communications services, though Embratel is evolving from being a long-distance revenue-based company to being an integrated telecommunications provider. Through Embratel’s high-speed data network, TELINT offers a broad array of products and services to a substantial number of Brazil’s 500 largest corporations. In addition, through Embratel’s partnership in Net Serviços de Comunicação S.A., the largest cable television operator in Brazil, TELINT offers triple play services in Brazil, whose network passes approximately 10.8 million homes.

 

   

Colombia. TELINT operates in Colombia through TELMEX Colombia S.A. and several cable television subsidiaries that TELINT has acquired beginning in October 2006 and whose network passes 4.9 million homes. TELINT offers pay television, data solutions, access to the Internet and voice services. TELINT also bundles these services through double and triple play offerings.

 

   

Argentina. In Argentina, TELINT provides data transmission, Internet access, and local and long-distance voice services to corporate and residential customers, data administration and hosting through two data centers and a yellow pages directory in print and on the Internet. Modular Internet and telephone access through WiMax in the 3.5 GHz frequency and GPON technologies is in the process of being deployed to service small- to medium-sizes businesses.

 

   

Chile. In Chile, TELINT provides to the small- and medium-sized business segment as well as to corporate customers data transmission, long-distance and local telephony, private telephony, virtual private and long-distance networks, dedicated Internet access and high capacity media services to business customers, along with other advanced services. TELINT services the residential market as well with long-distance telephone services, broadband, local telephony and pay cable and digital satellite television. TELINT’s nationwide wireless network in the 3.4-3.6 GHz frequency employs WiMax technology.

 

   

Peru. In Peru, TELINT provides data, Internet access, fixed-line telephony including domestic and international long-distance, public telephony, application-managed services for residential and corporate clients, virtual private networks, pay television as well as a yellow pages directory in print and on the Internet. Through its acquisition of cable television capabilities in Peru, TELINT has a network that passes approximately 300,000 homes. TELINT recently began offering wireless telephony using CDMA 450 MHz technology in the interior provinces of the country. TELINT also employs a WiMax platform in the 3.5 GHz frequency.

 

   

Yellow pages. TELINT’s yellow pages business operates in five countries and it publishes a total of 181 directories. Of these, 127 directories are in Mexico with presence in all of the states and Mexico City, 48 directories are in 31 states of the United States with particular focus to Hispanic

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

 

speaking markets, 2 directories are in Peru in the city of Lima, and 2 directories are in Argentina in the City of Buenos Aires. In Colombia, operations began in 2009 with 2 directories in the City of Cali.

 

   

Ecuador. TELINT entered the telecommunications market in Ecuador in March 2007 as a competitive alternative to local incumbents in the residential and business segments, and it offers a wide array of voice, data, and Internet services as well as pay television.

TELINT is a sociedad anónima bursátil de capital variable organized under the laws of Mexico, with its principal executive offices at Avenida de los Insurgentes 3500, Colonia Peña Pobre, Delegación Tlalpan, 14060 México, D.F., México. The telephone number of TELINT at this location is 52 (55) 5223-3200.

Recent Developments

Changes in Tax Rates

In Mexico, a general tax reform become effective on January 1, 2010, pursuant to which there will be a temporary increase in the corporate income tax rate from 28% to 30% from 2010 through 2012. This increase will be followed by a reduction to 29% for the tax year 2013 and a further reduction in 2014 to return to the current rate of 28%.

Board of Directors Changes

At the ordinary shareholders’ meeting held on December 15, 2009, the shareholders of TELINT accepted the resignation of Eric D. Boyer from the board of directors. Michael Bowling and Louis C. Camilleri were appointed as independent members of the board of directors at such meeting.

Acquisitions and Investments

In February 2009, TELINT paid Ps.77.1 million to Pedregales del Sur, S.A. de C.V. and Inmobiliaria Carso, S.A. de C.V., both related parties, to acquire 100% of the shares of Contenido Cultural y Educativo, S.A. de C.V., which sells print advertising. As a result of this acquisition, TELINT recorded an amount of Ps. 26,943 million as a contribution to stockholders.

In April 2009, TELINT paid Ps. 247.9 million to Impulsora para el Desarrollo y el Empleo en América Latina, S.A.B. de C.V., a related party, to acquire 51% of the shares of Eidon Software, S.A. de C.V., a software services provider. As a result of this acquisition, TELINT recorded an amount of Ps. 91,434 million as a contribution to stockholders.

In December 2009, TELINT acquired the remaining 20% non-controlling interest of Sección Amarilla USA, LLC for Ps. 106.3 million.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

Information About TELECOM

TELECOM is a holding company the principal assets of which consist of shares of TELINT and shares of TELMEX. Based on beneficial ownership reports filed with the SEC, TELECOM holds, directly or indirectly, 48.7% of the outstanding TMX L Shares, 23.3% of the outstanding TMX A Shares and 73.9% of the TMX AA Shares (in the aggregate, 59.4% of all outstanding shares of TELMEX). As of February 28, 2010, TELECOM owned 50.9% of the outstanding TELINT L Shares, 23.3% of the TELINT A Shares and 73.9% of TELINT’s outstanding series AA shares (in the aggregate, 60.7% of all outstanding shares of TELINT).

Information About TELMEX

TELMEX is a sociedad anónima bursátil de capital variable organized under the laws of Mexico. Substantially all of TELMEX’s operations are conducted in Mexico. TELMEX owns and operates a fixed-line telecommunications system in Mexico, where it is the only nationwide provider of fixed-line telephone services. TELMEX also provides other telecommunications and telecommunications-related services such as corporate networks, Internet access services, information network management, telephone and computer equipment sales and interconnection services to other carriers.

In September 2000, TELMEX transferred its Mexican wireless business and foreign operations at the time to AMX in an escisión, or spin-off. Beginning in 2004, TELMEX expanded its operations outside Mexico through a series of acquisitions in Brazil, Argentina, Chile, Colombia, Peru, Ecuador and the United States. In December 2007, TELMEX transferred its Latin American and yellow pages directory businesses to TELINT in a second escisión.

Market Information

AMX

Our shares and ADSs are listed or quoted on the following markets:

 

AMX L Shares

  

Mexican Stock Exchange—Mexico City

Mercado de Valores Latinoamericanos en Euros

(LATIBEX)—Madrid

AMX L ADSs

  

New York Stock Exchange—New York

Frankfurter Wertpapierbörse—Frankfurt

AMX A Shares

   Mexican Stock Exchange—Mexico City

AMX A ADSs

   NASDAQ National Market—New York

The following table sets forth, for the periods indicated, the reported high and low sales prices for the AMX L Shares on the Mexican Stock Exchange and the reported high and low sales prices for the AMX L ADSs on the New York Stock Exchange, or “NYSE.” Prices for all periods have been adjusted to reflect the three-for-one stock split effected in July 2005, but have not been restated in constant currency units.

 

     Mexican Stock Exchange    NYSE
     High    Low    High    Low
     (Mexican pesos per
AMX L Share)
  

(U.S. dollars per

AMX L ADS)

Annual highs and lows

           

2005

   Ps. 16.15    Ps. 8.65    U.S.$  29.54    U.S.$  15.21

2006

   24.13    15.21      44.40      27.00

2007

   36.09    22.85      66.93      40.89

2008

   35.09    16.29      66.75      23.63

2009

   32.00    18.32      49.69      23.66

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

     Mexican Stock Exchange    NYSE
     High    Low    High    Low
     (Mexican pesos per
AMX L Share)
  

(U.S. dollars per

AMX L ADS)

Quarterly highs and lows

           

2008:

           

First quarter

   Ps. 34.35    Ps. 26.66    U.S.$  64.10    U.S.$  52.70

Second quarter

   35.09    26.89      66.75      52.25

Third quarter

   27.26    23.45      53.23      43.01

Fourth quarter

   25.54    16.29      46.71      23.63

2009:

           

First quarter

   Ps. 22.90    Ps. 18.32    U.S.$ 34.12    U.S.$  23.66

Second quarter

   25.84    19.57      39.07      29.10

Third quarter

   31.16    24.88      47.66      37.17

Fourth quarter

   32.00    28.99      49.69      42.63

Monthly highs and lows

           

2009:

           

October

   Ps. 31.88    Ps. 28.99    U.S.$ 48.82    U.S.$ 42.63

November

   31.96    29.87      49.24      45.07

December

   32.00    30.03      49.69      46.59

2010:

           

January

   Ps. 31.80    Ps. 27.59    U.S.$ 50.01    U.S.$ 42.94

February

   29.76    28.39      45.89      43.38

March

   31.47    28.30      50.81      44.90

 

Source: Bloomberg.

The table below sets forth, for the periods indicated, the reported high and low sales prices for the AMX A Shares on the Mexican Stock Exchange and the high and low bid prices for AMX A ADSs published by NASDAQ Stock Market, Inc., or “NASDAQ.” Bid prices published by NASDAQ for the AMX A ADSs are inter-dealer quotations and may not reflect actual transactions. Prices for all periods have been adjusted to reflect the three-for-one stock split effected in July 2005, but have not been restated in constant currency units.

 

     Mexican Stock Exchange    NASDAQ
     High    Low    High    Low
     (Mexican pesos per
AMX A Share)
  

(U.S. dollars per

AMX A ADS)

Annual highs and lows

           

2005

   Ps.16.16    Ps. 8.74    U.S.$  29.48    U.S.$ 15.09

2006

   24.09    15.15      44.38      26.80

2007

   35.94    22.81      66.95      40.88

2008

   35.50    16.00      66.40      24.03

2009

   32.09    17.91      49.97      23.44

Quarterly highs and lows

           

2008:

           

First quarter

   Ps. 34.70    Ps. 26.80    U.S.$ 64.00    U.S.$  52.31

Second quarter

   35.50    27.00      66.40      52.15

Third quarter

   27.23    24.10      53.17      43.03

Fourth quarter

   25.35    16.00      46.50      24.03

2009:

           

First quarter

   Ps. 22.47    Ps. 17.96    U.S.$ 34.84    U.S.$ 23.44

Second quarter

   25.70    18.70      38.96      29.17

Third quarter

   31.10    25.00      47.65      37.23

Fourth quarter

   32.09    28.90      49.97      42.51

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

     Mexican Stock Exchange    NASDAQ
     High    Low    High    Low
     (Mexican pesos per
AMX A Share)
   (U.S. dollars per
AMX A ADS)

Monthly highs and lows

           

2009:

           

October

   Ps. 31.80    Ps. 28.90    U.S.$  48.64    U.S.$  42.51

November

   32.09    29.50      49.10      44.44

December

   31.80    30.11      49.97      46.74

2010:

           

January

   Ps. 31.80    Ps. 27.61    U.S.$ 50.00    U.S.$ 43.02

February

   29.61    25.00      46.03      43.48

March

   31.40    27.01      50.57      44.85

 

Source: Bloomberg.

TELINT

TELINT Shares and TELINT ADSs are listed or quoted on the following markets:

 

TELINT L Shares

  

Mexican Stock Exchange—Mexico City

Mercado de Valores Latinoamericanos en Euros

(LATIBEX)—Madrid

TELINT L ADSs

   New York Stock Exchange—New York

TELINT A Shares

  

Mexican Stock Exchange—Mexico City

Mercado de Valores Latinoamericanos en Euros

(LATIBEX)—Madrid

TELINT A ADSs

   New York Stock Exchange—New York

The following table sets forth, for the periods indicated, the reported high and low sales prices for the TELINT L Shares on the Mexican Stock Exchange and the reported high and low sales prices for the TELINT L ADSs on the NYSE. Prices have not been restated in constant currency units.

 

     Mexican Stock Exchange    NYSE
     (Mexican pesos per
TELINT L Share)
  

(U.S. dollars per

TELINT L ADS)

     High    Low    High    Low

Annual highs and lows

           

2008

   Ps. 9.54    Ps. 5.20    U.S.$  17.96    U.S.$ 7.31

2009

   12.15    4.98      18.98      6.43

Quarterly highs and lows

           

2008:

           

Third quarter

   Ps. 8.35    Ps. 5.89    U.S.$  15.96    U.S.$ 10.67

Fourth quarter

   8.21    5.20      13.50      7.31

2009:

           

First quarter

   Ps. 8.47    Ps. 4.98    U.S.$ 12.73    U.S.$ 6.43

Second quarter

   8.83    6.30      13.10      8.92

Third quarter

   9.98    7.70      14.79      11.25

Fourth quarter

   12.15    8.41      18.98      12.50

Monthly highs and lows

           

2009:

           

October

   Ps. 9.90    Ps. 8.41    U.S.$ 15.03    U.S.$  12.50

November

   10.20    8.70      15.86      13.13

December

   12.15    10.01      18.98      15.55

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

     Mexican Stock Exchange    NYSE
     (Mexican pesos per
TELINT L Share)
  

(U.S. dollars per

TELINT L ADS)

     High    Low    High    Low

2010:

           

January

   Ps. 11.98    Ps. 11.29    U.S.$  18.88    U.S.$  17.55

February

   11.70    11.30      18.36      17.15

March

   12.20    11.54      19.39      18.23

 

Source: Thompson Reuters.

The following table sets forth, for the periods indicated, the reported high and low sales prices for the TELINT A Shares on the Mexican Stock Exchange and the reported high and low sales prices for the TELINT A ADSs on the NYSE. Prices have not been restated in constant currency units.

 

     Mexican Stock Exchange    NYSE
     (Mexican pesos per
TELINT A Share)
  

(U.S. dollars per

TELINT A ADS)

     High    Low    High    Low

Annual highs and lows

           

2008

   Ps. 9.23    Ps. 5.52    U.S.$  18.00    U.S.$ . 7.15

2009

   11.96    5.25      18.75      6.30

Quarterly highs and lows

           

2008:

           

Third quarter

   Ps. 7.88    Ps. 6.40    U.S.$  15.65    U.S.$  10.50

Fourth quarter

   7.80    5.52      13.98      7.15

2009:

           

First quarter

   Ps. 8.00    Ps. 5.25    U.S.$  12.50    U.S.$ 6.30

Second quarter

   8.30    6.25      12.90      8.51

Third quarter

   9.60    7.75      14.88      11.27

Fourth quarter

   11.96    8.70      18.75      12.87

Monthly highs and lows

           

2009:

           

October

   Ps. 9.50    Ps. 8.70    U.S.$  14.76    U.S.$  12.87

November

   9.90    8.90      15.77      13.00

December

   11.96    10.05      18.75      15.52

2010:

           

January

   Ps. 11.70    Ps. 11.00    U.S.$ 19.17    U.S.$ 17.25

February

   11.60    10.51      18.25      17.01

March

   11.85    10.51      19.06      17.75

 

Source: Thompson Reuters.

Trading On The Mexican Stock Exchange

The Mexican Stock Exchange, located in Mexico City, is the only stock exchange in Mexico. Founded in 1907, it is organized as a corporation and operates under a concession from the Ministry of Finance and Public Credit (Secretaría de Hacienda y Crédito Público, or “SHCP”). Trading on the Mexican Stock Exchange takes place principally through automated systems between the hours of 8:30 a.m. and 4:00 p.m. Mexico City time, each business day. The Mexican Stock Exchange operates a system of automatic suspension of trading in shares of a particular issuer as a means of controlling excessive price volatility, but under current regulations this system does not apply to securities such as the AMX A Shares, the AMX L Shares, the TELINT A Shares or the TELINT L Shares that are directly or indirectly (for example, through ADSs) quoted on a stock exchange (including for these purposes NASDAQ) outside Mexico.

Settlement is effected three business days after a share transaction on the Mexican Stock Exchange. Deferred settlement, even by mutual agreement, is not permitted without the approval of the CNBV. Most securities traded on the Mexican Stock Exchange, including ours, are on deposit with S.D. Indeval

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

Institución para el Depósito de Valores, S.A. de C.V., a privately owned securities depositary that acts as a clearinghouse for Mexican Stock Exchange transactions.

Information Concerning the Control Persons, Directors and

Executive Officers of AMX

 

1. Control Persons of AMX. Set forth below is the name, present principal occupation or employment and material occupations, positions, offices or employments for the past five years of each control person of AMX. The principal business address of each individual listed below is Paseo de las Palmas 736, Colonia Lomas de Chapultepec, México, D.F., México, 11000 and the business telephone number is +52 55 5625-4904. Each natural person listed below is a citizen of Mexico. During the past five years, none of the control persons has been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment decree or final order enjoining the control persons from future violations of, or prohibiting activities subject to, U.S. federal or state securities laws, or a finding of any violation of U.S. federal or state securities laws. Unless otherwise indicated, each such person has held his or her position set forth below for the past five years.

 

    

Name

  

Occupation

 

Carlos Slim Helú

   Honorary lifetime chairman of the Board of Directors of AMX. Mr. Slim Helú is also chairman of the Board of Directors of Carso Infraestructura y Construcción, S.A.B. de C.V. and Impulsora del Desarrollo y el Empleo de América Latina, S.A.B. de C.V.
 

Carlos Slim Domit

   Chairman of the Boards of Directors of Teléfonos de México, S.A.B. de C.V. and TELMEX Internacional, S.A.B. de C.V. Mr. Slim Domit also serves as Vice-Chairman of the Board of Directors of Carso Global Telecom, S.A.B. de C.V.
 

Marco Antonio Slim Domit

   Chairman and Chief Executive Officer of Grupo Financiero Inbursa, S.A.B. de C.V. Mr. Slim Domit also serves as director of Grupo Carso, S.A.B. de C.V., alternate director of Carso Global Telecom, S.A.B. de C.V.
 

Patrick Slim Domit

   See “Directors of América Móvil” and “Biographical Information – Directors and Executive Officers” below.
 

María Soumaya Slim Domit

   President of Museo Soumaya.
 

Vanessa Paola Slim Domit

   Private Investor.
 

Johanna Monique Slim Domit

   Private Investor.

 

2.

Directors of AMX. Set forth below is the name, present principal occupation or employment and material occupations, positions, offices or employments for the past five years of each director of AMXl. The principal address of AMX and the current business address for each individual listed below is Lago Alberto 366, Edificio Telcel I, Colonia Anáhuac, Delegación Miguel Hidalgo, 11320, México D.F., México and its telephone number at such office is (5255) 2581-4719. During the past five years, none of the control persons has been (i) convicted in a criminal proceeding (excluding

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

traffic violations or similar misdemeanors) or (ii) a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment decree or final order enjoining the control persons from future violations of, or prohibiting activities subject to, U.S. federal or state securities laws, or a finding of any violation of U.S. federal or state securities laws.

 

    

Name

  

Current Position

 

Patrick Slim Domit

   Chairman and Member of the Executive Operations Committee in the U.S. and Puerto Rico.
 

Daniel Hajj Aboumrad

   Director and Member of the Executive Committee and Investments Committee in the U.S. and Puerto Rico.
 

Mike Viola

   Director.
 

Ernesto Vega Velasco

   Director and Member of the Audit and Corporate Governance Committee.
 

Santiago Cosío Pando

   Director and Member of the Executive Operations Committee in the U.S. and Puerto Rico.
 

Alejandro Soberón Kuri

   Director, Chairman of the Audit and Corporate Governance Committee and Member of the Executive Operations Committee in the U.S. and Puerto Rico.
 

Rayford Wilkins

   Director and Member of the Executive Committee.
 

Carlos Bremer Gutiérrez

   Director and Member of the Audit and Corporate Practices Committee and the Executive Operations Committee in the U.S. and Puerto Rico
 

Pablo Roberto González Guajardo

   Director and Member of the Audit and Corporate Practices Committee and the Executive Operations Committee in the U.S. and Puerto Rico
 

David Ibarra Muñoz

   Director and Member of the Executive Operations Committee in the U.S. and Puerto Rico

 

3. Executive Officers of AMX. Set forth below is the name, present principal occupation or employment and material occupations, positions, offices or employments for the past five years of each executive officer of AMX. The principal address of AMX and the current business address for each individual listed below is Lago Alberto 366, Edificio Telcel I, Colonia Anáhuac, Delegación Miguel Hidalgo, 11320, México D.F., México and its telephone number at such office is (5255) 2581-4449. During the past five years, none of the control persons has been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment decree or final order enjoining the control persons from future violations of, or prohibiting activities subject to, U.S. federal or state securities laws, or a finding of any violation of U.S. federal or state securities laws.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

    

Name

  

Current Position

 

Daniel Hajj Aboumrad

   Chief Executive Officer
 

Carlos José García Moreno Elizondo

   Chief Financial Officer
 

José Elías Briones Capetillo

   Chief Accounting Officer
 

Carlos Cárdenas Blásquez

   Latin American Operations
 

Alejandro Cantú Jiménez

   General Counsel

 

4. Biographical Information – Directors and Executive Officers. The following provides biographical information about the control persons, directors and executive officers of América Móvil.

Patrick Slim Domit. Mr. Slim Domit served as Chief Executive Officer of Grupo Carso, S.A.B. de C.V., with its principal address at Miguel de Cervantes Saavedra 225, Colonia Granada, Delegación Miguel Hidalgo, 11520, Mexico, D.F., and Vice President of Commercial Markets of Teléfonos de México, S.A.B. de C.V., a telecommunications company, with its principal address at Parque Vía 190, Piso 10, Colonia Cuauhtémoc, Delegación Cuauhtémoc, 06599, Mexico, D.F. In addition, Mr. Slim Domit has served as a Chairman of América Móvil since 2004. Mr. Slim Domit also serves as director of Grupo Carso, S.A.B. de C.V., Impulsora del Desarrollo y el Empleo en América Latina, S.A.B. de C.V., Carso Global Telecom, S.A.B. de C.V., and as alternate director of Teléfonos de México, S.A.B. de C.V. He is a citizen of Mexico.

Daniel Hajj Aboumrad. Mr. Hajj Aboumrad’s principal occupation since 2000 has been serving as Chief Executive Officer of América Móvil. In addition, Mr. Hajj Aboumrad has served as a director of América Móvil since 2000. Mr. Hajj Aboumrad also serves as director of Grupo Carso, S.A.B. de C.V., and as alternate director of Carso Global Telecom S.A.B. de C.V. He is a citizen of Mexico.

Mike Viola. Mr. Viola’s principal occupation since April, 2004 has been serving as Senior Vice President of Corporate Finance for AT&T, Inc., a telecommunications company, with its principal address at 208 S. Akard St., Dallas, TX. In addition, Mr. Viola has served as a director of América Móvil since 2009. Mr. Viola also serves as director of Teléfonos de México, S.A.B. de C.V. Mr. Viola is a citizen of the United States.

Ernesto Vega Velasco. Mr. Vega Velasco has been in retirement since 2001. Mr. Vega Velasco has served as a director of América Móvil since 2007. Mr. Vega Velasco also serves as Chairman of Wal-Mart de México, S.A.B. de C.V., director of Kuo, S.A.B. de C.V., Dine, S.A.B. de C.V. and Grupo Aeroportuario del Pacífico, S.A.B. de C.V., and alternate director of Industrias Peñoles, S.A.B. de C.V. He is a citizen of Mexico.

Santiago Cosío Pando. Mr. Cosío Pando’s principal occupation has been serving as President of Grupo Pando, S.A. de C.V., with its principal address at Lerdo 321, Colonia San Simón Tolnahuac, 06920. Mr. Cosío Pando has served as a director of América Móvil since 2008. He is a citizen of Mexico.

Alejandro Soberón Kuri. Mr. Soberón Kuri’s principal occupation has been serving as Chief Executive Officer of Corporación Interamericana de Entretenimiento, S.A.B. de C.V., with its principal address at Avenida Industria Militar S/N, Grada 2, Acceso 2, Colonia Residencial Militar, Delegación Miguel Hidalgo, 11600, México, D.F. In addition, Mr. Soberón Kuri has served as a Director of América Móvil since 2000. Mr. Soberón Kuri also serves as chairman of the board of directors of Corporación Interamericana de Entretenimiento, S.A.B. de C.V., since 1995. He is a citizen of Mexico.

Rayford Wilkins. Mr. Wilkins’ served as Group President of AT&T from February 2005 through October 2008 and as CEO of the AT&T Diversified Businesses division from October 2008 to the present. AT&T

 

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Preliminary Disclosure Statement

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is a telecommunications company with its principal address at 208 S. Akard ST., Dallas, TX. In addition, Mr. Wilkins has served as a director of América Móvil since 2005. Mr. Wilkins also serves as director of TELMEX Internacional, S.A.B. de C.V. Mr. Wilkins is a citizen of the United States.

Carlos Bremer Gutiérrez. Mr. Bremer Gutiérrez’s principal occupation has been serving as Chief Executive Officer of Value Grupo Financiero, S.A.B. de C.V., with its principal address at Avenida Bosques del Valle 106 Poniente, Colonia Bosques del Valle, 66250, San Pedro Garza García, Nuevo Léon, Mexico. In addition, Mr. Bremer Gutiérrez has served as a director of América Móvil since 2004. Mr. Bremer Gutiérrez also serves as director of Value Grupo Financiero, S.A.B. de C.V., since 1993. He is a citizen of Mexico.

Pablo Roberto González Guajardo. Mr. González Guajardo’s principal occupation has been serving as Chief Executive Officer of Kimberly-Clark de Mexico, S.A.B. de C.V., with its principal address at Jaime Balmes 8, Piso 9, Colonia Los Morales Polanco, Delegación Miguel Hidalgo, 11510, México, D.F. In addition, Mr. González Guajardo has served as a director of América Móvil since 2007. Mr. González Guajardo also serves as director of Corporación Scribe, S.A.P.I. de C.V. and as alternate director of Kimberly Clark de Mexico, S.A.B. de C.V. He is a citizen of Mexico.

David Ibarra Muñoz. Mr. Ibarra Muñoz served as Chief Executive Officer of Nacional Financiera, S.N.C., and served in the Mexican Ministry of Finance and Public Credit (Secretaría de Hacienda y Crédito Público). In addition, Mr. Ibarra Muñoz has served as a director of América Móvil since 2000. Mr. Ibarra Muñoz also serves as director of Grupo Financiero Inbursa, S.A.B. de C.V. and Impulsora del Desarrollo y el Empleo en América Latina, S.A.B. de C.V., and as alternate director of Grupo Carso, S.A.B. de C.V. He is a citizen of Mexico.

Carlos José García Moreno Elizondo. Mr. García Moreno Elizondo has served as Chief Financial Officer of América Móvil since 2001. In addition, Mr. García Moreno Elizondo serves as director of Banco Inbursa, S.A. since 2002. He is a citizen of Mexico.

José Elías Briones Capetillo. Mr. Briones Capetillo has served as Chief Accounting Officer of América Móvil since 2001. He is a citizen of Mexico.

Carlos Cárdenas Blásquez. Mr. Cárdenas Blásquez has served as Executive Director of Latin American Operations of América Móvil since 2000. He is a citizen of Mexico.

Alejandro Cantú Jiménez. Mr. Cantú Jiménez has served as General Counsel of América Móvil since 2001. In addition, Mr. Cantu Jiménez serves as corporate secretary of the Board of Directors of AMX since 2006. He is a citizen of Mexico.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

24. INFORMATION REQUIRED BY EXHIBIT H OF THE GENERAL RULES

The Offer constitutes a concurrent tender and subscription offer and, as such, is subject to the information disclosure requirements set forth in Exhibit H of the General Rules, which information is included below. Although the participants in the Offer will subscribe Series L Shares of AMX, the Series L Shares of AMX are not the subject matter of the Offer and are deemed to constitute an integral element thereof. The Offer is a concurrent purchase and subscription offer and, accordingly, those TELINT shareholders who may elect to participate in the Offer by tendering their TELINT Shares will subscribe AMX Shares from among those currently held in AMX’s treasury.

24.1 General

a. Glossary of defined terms

See the Glossary of Defined Terms included in this Disclosure Statement.

b. Executive Summary

The information required to be included under this caption is deemed incorporated herein by reference to Section 4, “The Company” (pages 19 to 62), of AMX’s Annual Report.

c. Risk Factors

The Offer and the resulting subscription of the AMX Shares involve various material risks and consequences. Investors should carefully consider the risk factors described in this Disclosure Statement. Such risk factors are not the only ones to which AMX is exposed. There may be additional risks and uncertainties unknown to AMX or which AMX does not currently deem relevant but which could affect its business operations.

The information required to be included under this caption is deemed incorporated herein by reference to Section 3, “Critical Information—Risk Factors” (pages 7 to 18), of AMX’s Annual Report.

The risk factors incorporated herein by reference to AMX’s Annual Report have not been supplemented in any manner that could affect AMX’s financial condition and/or current strategy. Given AMX’s primary line of business, no environmental risk factors have been included therein.

For additional information on the risk factors relating to the Offer, see Section 15, “Risk Factors”, of this Disclosure Statement.

d. Other Securities

Securities Registered with the RNV

AMX’s shares were first registered with the RNV and listed for trading on the BMV in February 2001. AMX has filed when due with the CNBV and the BMV all the quarterly and annual information required by the LMV and the General Rules. In addition, AMX has filed when due all the relevant event reports and complied with all the applicable ongoing information requirements set forth in the applicable Mexican laws.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

Below is a list of AMX’s registered securities as of the date hereof:

 

   

Initial commercial paper (certificados bursátiles) program in the aggregate amount of Ps.5,000,000,000.00 (five billion Pesos), approved for registration by the CNBV on August 9, 2001. AMX has placed the following issues under such program:

 

Issue Amount

(in millions of Pesos)

   Trading Symbol      Date of Issue      Maturity

Ps. 1,500

   AMX 01      August 10, 2001      August 10, 2006*

Ps. 1,750

   AMX 01-2      October 11, 2001      April 24, 2003*

Ps. 1,750

   AMX 01-3      October 12, 2001      October 5, 2006*

 

  * Repaid in full by AMX upon maturity.

 

   

Second commercial paper (certificados bursátiles) program in the aggregate amount of Ps.5,000,000,000.00 (five billion Pesos), approved for registration by the CNBV on January 30, 2002. AMX has placed the following issues under such program

 

Issue Amount

(in millions of Pesos)

   Trading Symbol      Date of Issue      Maturity

Ps. 500

   AMX 02      January 31, 2002      January 31, 2007*

Ps. 1,250

   AMX 02-2      January 31, 2002      January 26, 2006*

Ps. 1,000

   AMX 02-3      March 22, 2002      March 23, 2009*

Ps. 400

   AMX 02-4      May 9, 2002      January 31, 2007*

Ps. 400

   AMX 02-5      May 9, 2002      May 11, 2009*

Ps. 1,000

   AMX 02-6      June 24, 2002      June 21, 2007*

Ps. 450

   AMX 02-7      June 24, 2002      June 23, 2005*

 

  * Repaid in full by AMX upon maturity.

 

   

Third commercial paper (certificados bursátiles) program in the aggregate amount of Ps.5,000,000,000.00 (five billion Pesos), approved for registration by the CNBV on September 25, 2001. AMX has placed the following issues under such program

 

Issue Amount

(in millions of Pesos)

   Trading
Symbol
     Date of Issue      Maturity

Ps. 1,000

   AMX 03      January 20, 2003      January 26, 2006*

Ps. 1,000

   AMX 03-2      July 11, 2003      July 3, 2008*

Ps. 1,000

   AMX 03-3      September 5, 2003      August 28, 2008*

Ps. 750

   AMX 04      July 26, 2004      July 15, 2010

Ps. 1,000

   AMX 04-02      July 26, 2004      July 17, 2008*

 

  * Repaid in full by AMX upon maturity.

 

   

Fourth commercial paper (certificados bursátiles) program in the aggregate amount of Ps.5,000,000,000.00 (five billion Pesos), approved for registration by the CNBV on August 9, 2001. The program’s registration expired without AMX having issued any securities thereunder.

 

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Fifth revolving commercial paper (certificados bursátiles) program in the aggregate amount of Ps.10,000,000,000.00 (ten billion Pesos) or its equivalent in UDIs, approved for registration by the CNBV on April 11, 2006. AMX has placed the following issues under such program:

 

Issue Amount

(in millions of Pesos)

   Trading Symbol      Date of Issue      Maturity

Ps. 500

   AMX 07      April 11, 2007      April 5, 2012

Ps. 2,500

   AMX 07-2      November 1, 2007      October 28, 2010

Ps. 2,000

   AMX 07-3      November 1, 2007      October 19, 2017

Ps. 2,500

   AMX 08      March 7, 2008      February 22, 2018

AMX has placed 10 (ten) debt issues in the international securities markets, as follows:

 

Issue Amount

(in millions)

   Trading Symbol      Date of Issue      Maturity

US$ 500

   AMXLMM FLOAT 08      December 27, 2006      June 27, 2008*

Ps 8,000

   AMXLMM 36 12/36      December 18, 2006      December 18, 2036

Ps 5,000

   AMXLMM 9 01/16      October 5, 2005      January 15, 2016

US$ 1,000

   AMXLMM 6 3/8 03/35      February 25, 2005      March 1, 2035

US$ 500

   AMXLMM 5 3/4 01/15      November 3, 2004      January 15, 2015

US$ 300

   AMXLMM FLOAT 07      April 27, 2004      April 27, 2007*

US$ 500

   AMXLMM 4 1/8 03/09      March 9, 2004      March 1, 2009*

US$ 800

   AMXLMM 5 1/2 03/14      March 9, 2004      March 1, 2014

US$ 600

   AMXLMM 5 5/8 11/17      October 30, 2007      November 15, 2017

US$ 400

   AMXLMM 6 1/8 11/37      October 30, 2007      November 15, 2037

UF 4

   AMXLMM 3 04/01/14      April 1, 2009      April 1, 2014

JPY 13

   N/A      August 24, 2009      August 24, 2034

US$ 750

   AMXLMM 5 10/16/19      October 16, 2009      October 16, 2019

 

* Repaid in full by AMX upon maturity.

 

   

Commercial paper program in the aggregate amount of Ps.10,000,000,000 (ten billion Pesos), maturing June 3, 2010, approved for registration by the CNBV on June 3, 2008.

 

   

Revolving commercial paper (certificados bursátiles) program in the aggregate amount of Ps.20,000,000,000.00 (twenty billion Pesos) or its equivalent in UDIs, approved for registration by the CNBV on September 9, 2008. AMX has placed the following issues under this program:

 

Issue Amount

(in millions of Pesos/UDIs)

   Trading Symbol    Date of Issue    Maturity

UDIS 516,443,800

   AMX 08U    September 12, 2008    September 6, 2013

Ps. 3,000

   AMX 08-2    September 12, 2008    September 6, 2013

 

   

Commercial paper program in the aggregate amount of Ps.10,000,000,000.00 (ten billion Pesos), maturing October 20, 2011, approved for registration by the CNBV on October 10, 2008.

 

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Preliminary Disclosure Statement

Dated April 29, 2010

 

Securities Registered in the International Markets

In addition, AMX’ shares and ADSs are registered with the SEC and listed for trading in the following markets:

 

Series L shares

  

LATIBEX

Series L ADSs

  

New York Stock Exchange

FWB Frankfurter Wertpapierbörse

Series L ADSs

  

NASDAQ National Market

e. Public Documents

The information contained in this Disclosure Statement and the applications filed with the CNBV and the BMV are available for consultation at the Internet addresses of the CNBV and the BMV, ww.cnbv.gob.mx and www.bmv.com.mx, respectively.

AMX will make copies of such documents available to any investor upon written request addressed to Lago Alberto 366, Edificio Telcel I, Segundo Piso, Colonia Anahuac, 11320 Mexico, D.F., Mexico, attention Daniela Lecuona Torras, Investor Relations Department, telephone (5255) 2581-4449, email: daniela.lecuona@americamovil.com.

Additional information about AMX can be obtained at AMX’s Internet address, www.americamovil.com. Such information does not constitute part of this Disclosure Statement.

 

24.2 The Offer

a. Characteristics of the Securities

See sections 5 and 15 of this Disclosure Statement, “The Offer” and “Rights of the Shareholders”, respectively.

b. Use of Proceeds

Not applicable. AMX will not receive any of the proceeds of the Offer and will allocate such proceeds to purchase 100% (one hundred percent) of the outstanding shares of stock of TELINT as of the date hereof.

c. Distribution Plan

Inbursa is the underwriter for the Offer. The AMX Shares may only be subscribed by those electing to participate in the Offer in the terms set forth in Section 5(j) of this Disclosure Statement.

Inbursa does not intend to enter into any management or syndication agreement in connection with the Offer.

It is expected that a notice concerning the Offer will be published on the Date of Commencement, both through the Emisnet system maintained by the BMV and in various national newspapers.

Neither AMX nor Inbursa have knowledge of the intent of any of AMX’s principal shareholders, officers and directors to participate in the Offer and, accordingly, subscribe any AMX Shares. Pursuant to Article 201 of the LMV, the members of TELECOM’s board of directors and Chief Executive Officer have informed AMX that they and their related parties intend to participate in the Offer and tender the TELECOM Shares held by them. For additional information, see Section 1 of this Disclosure Statement, “Opinions of the Board of Directors and the Independent Experts.”

 

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The Offer is a concurrent tender and subscription offer and, as a result, any TELECOM shareholder who may wish to participate in the Offer and subscribe AMX Shares will have the right to so participate in the same terms and conditions as all other eligible shareholders, as described in this Disclosure Statement.

Inbursa currently maintains and may in the future maintain financial and other service relationships with AMX, for which it receives compensation on an arm’s length basis (including the compensation payable thereto in its capacity as the underwriter for the Offer). Inbursa believes that no such service poses a conflict of interest with AMX for purposes of the Offer.

[Letter]

d. Expenses

See Section 12 of this Disclosure Statement, “Capital Resources.”

e. Capital Structure Following the Offer

See AMX’s Pro Forma Financial Statements, which are attached as Exhibit 26(d) to this Disclosure Statement.

f. Duties of the Trustee

Not applicable.

g. Persons Involved in the Offer

The following persons have provided advisory and consulting services in connection with the authorization of this Disclosure Statement and the Offer:

 

   

AMX;

 

   

Bufete Robles Miaja, S.C., as outside counsel;

 

   

Mancera, S.C., a Member Practice of Ernst & Young Global, as external auditors;

 

   

Inbursa, as the Underwriter.

 

   

Banco Inbursa, S.A., Institución de Banca Múltiple, Grupo Financiero Inbursa, as financial advisor.

AMX’s head of investor relations is Daniela Lecuona Torras, whose contact information is as follows: Lago Alberto 366, Edificio Telcel I, Segundo Piso, Colonia Anáhuac, 11320, Mexico, Federal District, Mexico, telephone +(5255) 2581-4449, email: daniela.lecuona@americamovil.com.

None of the aforementioned persons holds a direct or indirect interest in AMX.

 

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Dated April 29, 2010

 

h. Dilution

Included below are the amount of the dilution effect and percentage of share subscription, calculated in accordance with the requirements set forth in the General Rules, resulting from the difference between the theoretical subscription price and the per share book value, taking into consideration AMX’s financial statements as of December 31, 2009. Also included are the effect in terms of amount and percentage for current shareholders that will not participate in the Offer, and the dilutive effect in gross revenues and book value per share resulting from increase in the number of outstanding shares.

As of December 31, 2009, the AMX per share book value was Ps.5.54 per share. The book value per AMX Share represents the accounting value of AMX’s total assets less its total liabilities, divided by AMX’s aggregate outstanding shares as of the date of calculation. The pro forma book value per AMX Share as of December 31, 2009, will increase by Ps1.69 per AMX Share (without giving effect to the fees and expenses payable in connection with the Offer), the later:

 

   

after giving effect to share subscription at the reference value in the TELECOM Offer; and

 

   

after giving effect to share subscription at the Offer reference value, assuming all shareholders decide to participate and not receive cash.

This amount represents for AMX existing shareholders an immediate theoretical increase of Ps.1.69 in per share book value and for new investors who subscribe at the reference value in the TELECOM and TELINT Offers this will represent an immediate theoretical dilution of Ps.24.03 in the investment value without considering the current book value for both TELECOM and TELINT.

The following table shows the dilution in book value:

 

     Ps. per Share

AMX Reference Value in the Offers

   31.26

Book Value before Offers

   5.54

Increase in book value r