Amendment No. 1 to Form F-4
Table of Contents

As filed with the U.S. Securities and Exchange Commission on May 28, 2010

Registration Statement No. 333-166721

 

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

AMENDMENT NO. 1

TO

FORM F-4

 

Registration Statement Under

the Securities Act of 1933

 

 

AMÉRICA MÓVIL, S.A.B. DE C.V.

(Exact Name of Registrant as Specified in its Charter)

 

 

America Mobile

(Translation of Registrant’s Name into English)

 

 

 

United Mexican States   4813   Not Applicable

(State or Other Jurisdiction

of Incorporation or Organization)

 

(Primary Standard Industrial

Classification Code Number)

 

(I.R.S. Employer

Identification No.)

Lago Alberto 366

Colonia Anáhuac

Edificio Telcel I, Segundo Piso

11320 México, D.F., México

Telephone: (5255) 2581-4449

(Address and telephone number of Registrant’s principal executive offices)

 

 

CT Corporation System

111 Eighth Avenue, 13th Floor

New York, New York 10011

Telephone: (212) 894-8940

(Name, address and telephone number of agent for service)

 

 

Copies to:

Nicolas Grabar, Esq.

Daniel Sternberg, Esq.

Duane McLaughlin, Esq.

Cleary Gottlieb Steen & Hamilton LLP

One Liberty Plaza

New York, New York 10006

(212) 225-2000

 

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

 

Exchange Act Rule 13e-4(i) (Cross Border Issuer Tender Offer)  ¨  
Exchange Act Rule 14d-1(d) (Cross Border Third-Party Tender Offer)  ¨  

 

 

CALCULATION OF REGISTRATION FEE

 

 

Title of Each Class of

Securities to be Registered

  Amount
to be
Registered (1)
  Proposed
Maximum
Offering Price
Per Share
  Proposed
Maximum
Aggregate
Offering Price (2)
  Amount of
Registration Fee (3)

Series L Shares, without par value (4)

  2,638,509,332   Not Applicable   $3,206,031,350.29   $228,590.04
 
 
(1) Represents the maximum number of América Móvil, S.A.B. de C.V. Series L Shares, without par value, issuable upon consummation of this offer for all of the outstanding Telmex Internacional, S.A.B. de C.V. Series L Shares and Series A Shares, without par value, calculated as the product of (i) 7,073,751,560, the number of Telmex Internacional, S.A.B. de C.V. Series L Shares and Series A Shares eligible to be tendered in the offer (excluding the shares held by Carso Global Telecom, S.A.B. de C.V.) and (ii) the exchange ratio of 0.373 América Móvil, S.A.B. de C.V. Series L Shares for every one Telmex Internacional, S.A.B. de C.V. Series L Share or Series A Share. Offers and sales of América Móvil, S.A.B. de C.V. Series L Shares made to non-U.S. persons in the Mexican Offer (as defined herein) are not covered by this registration statement.
(2) Estimated solely for the purpose of calculating the registration fee computed pursuant to Rule 457(f)(1) and Rule 457(f)(3), the proposed maximum offering price is equal to the sum of (A) the product of (i) U.S.$0.93, the average of the high and low sale prices per American depositary share (representing 20 Telmex Internacional, S.A.B. de C.V. Series A Shares) as reported on the New York Stock Exchange on May 5, 2010, divided by 20 and (ii) 301,661,031 and (B) the product of (i) U.S.$0.93, the average of the high and low sale prices per American depositary share (representing 20 Telmex Internacional, S.A.B. de C.V. Series L Shares) as reported on the New York Stock Exchange on May 5, 2010, divided by 20, and (ii) 6,772,090,529; less (C) U.S.$3,372,557,600.51, the estimated aggregate amount of cash to be paid by América Móvil in connection with the TII Offer (as defined herein).
(3) Computed in accordance with Rule 457(f) as the proposed maximum offering price of U.S.$3,206,031,350.29 multiplied by 0.00007130.
(4) American depositary shares representing the Series L Shares registered hereby are registered pursuant to a separate Registration Statement on Form F-6 (File No. 333-126165).

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

 

 

 


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The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission, in which this prospectus is included, is declared effective. This prospectus is not an offer to sell these securities, and it is not soliciting an offer to buy these securities, in any jurisdiction where the offer or sale of these securities is not permitted.

 

PROSPECTUS

LOGO

AMÉRICA MÓVIL, S.A.B. DE C.V.

OFFER TO EXCHANGE OR PURCHASE ANY AND ALL:

SERIES A OR SERIES L SHARES OF TELMEX INTERNACIONAL, S.A.B. DE C.V. (“TELMEX INTERNACIONAL”) and AMERICAN DEPOSITARY SHARES, EACH OF WHICH REPRESENTS 20 SUCH SHARES (COLLECTIVELY, THE “TII SECURITIES”)

FOR

SERIES L SHARES OF AMÉRICA MÓVIL, S.A.B. DE C.V. (“AMÉRICA MÓVIL”) OR AMERICAN DEPOSITARY SHARES, EACH OF WHICH REPRESENTS 20 SUCH SHARES

(COLLECTIVELY, THE “AMX SECURITIES”),

or

CASH,

subject to the terms and conditions described in this prospectus.

 

THIS OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON JUNE 10, 2010, UNLESS EXTENDED.

 

Eligible Security   Corresponding Consideration per Eligible Security

Telmex Internacional Series L Shares (“TII L Shares”)

 

Ps. 11.66 in cash, to be paid in U.S. dollars

or

0.373 América Móvil Series L Shares (“AMX L Shares”)

Telmex Internacional Series A Shares (“TII A Shares”)

 

Ps. 11.66 in cash, to be paid in U.S. dollars

or

0.373 AMX L Shares

Telmex Internacional American Depositary Shares, each representing 20 TII L Shares (“TII L ADSs”)

 

Ps. 233.20 in cash, to be paid in U.S. dollars

or

0.373 American Depositary Shares (“AMX L ADSs”), each AMX L ADS representing 20 AMX L Shares

Telmex Internacional American Depositary Shares, each representing 20 TII A Shares (“TII A ADSs” and, together with the TII L ADSs, the “TII ADSs”)

 

Ps. 233.20 in cash, to be paid in U.S. dollars

or

0.373 AMX L ADSs

Our obligation to accept the TII Securities for exchange or purchase is subject to the conditions set forth in this prospectus.

We do not currently own any TII Securities. We are making this offer to holders of TII Securities (the “U.S. Offer”) and the Mexican offer to holders of TII A Shares and TII L Shares (the “Mexican Offer,” and together with the U.S. Offer, the “TII Offer”).

In addition to the TII Offer, we are making a separate concurrent offer (the “CGT Offer”) for all of the outstanding Series A-1 shares of Carso Global Telecom, S.A.B. de C.V. (“CGT”), which owns 60.7% of the outstanding shares of Telmex Internacional as of February 28, 2010. CGT has announced publicly that it will not participate in the TII Offer. The TII Offer is conditioned upon the completion of the CGT Offer. The CGT Offer is not subject to registration under the Securities Act of 1933, as amended (the “Securities Act”) or to the requirements applicable to tender offers under Regulation 14D and Rules 14e-1 and 14e-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Holders of 82.7% of the outstanding shares of CGT (including members of the Slim Family (as defined herein) and certain affiliates) have announced that they will tender all of their shares of CGT into the CGT Offer in exchange for AMX L Shares. This prospectus relates only to the TII Offer and not the CGT Offer.

The AMX L Shares are listed on the Bolsa Mexicana de Valores, S.A.B. de C.V. of Mexico City (the “Mexican Stock Exchange”) and the Mercado de Valores Latinoamericanos en Euros (“LATIBEX”) of Madrid, Spain. The AMX L ADSs are listed on the New York Stock Exchange and the Frankfurter Wertpapierbörse.

For a discussion of the risk factors that you should consider in evaluating this offer, see “Risk Factors” beginning on page 33.

 

 

Neither the U.S. Securities and Exchange Commission nor any U.S. state securities commission has approved or disapproved of these securities or determined whether this prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

 

 

The date of this prospectus is May 28, 2010


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We have not authorized any person to provide any information or to make any representation in connection with this offer other than the information contained or incorporated by reference in this prospectus, and if any person provides any such information or makes any such representation of this kind, that information or representation must not be relied upon as having been authorized by us.

The U.S. Offer is open to all holders of TII L Shares and TII A Shares resident in the United States and to all holders of TII ADSs irrespective of residency. Copies of the offer documentation being used in the Mexican Offer and any related materials are not being, and should not be, mailed or otherwise distributed or sent in or into the United States.

The distribution of this prospectus and the making of this offer may, in certain jurisdictions, be restricted by law. The U.S. Offer is not being made, directly or indirectly, in or into, and will not be capable of acceptance from within Australia, Canada or Japan. Furthermore, the U.S. Offer is not being made, directly or indirectly, in or into, and will not be capable of acceptance from within, any jurisdiction in which the making of the U.S. Offer or the acceptance thereof would not be in compliance with the laws of that jurisdiction. Persons who come into possession of this prospectus should inform themselves of and observe any of these restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any jurisdiction. We do not assume any responsibility for any violation by any person of any of these restrictions.

THIS DOCUMENT IS SOLELY OUR RESPONSIBILITY AND HAS NOT BEEN REVIEWED OR AUTHORIZED BY THE COMISIÓN NACIONAL BANCARIA Y DE VALORES (THE MEXICAN NATIONAL BANKING AND SECURITIES COMMISSION, OR “CNBV”). THE TERMS AND CONDITIONS OF THE U.S. OFFER WILL BE NOTIFIED TO THE CNBV FOR INFORMATIONAL PURPOSES ONLY AND SUCH NOTICE DOES NOT CONSTITUTE A CERTIFICATION AS TO THE INVESTMENT VALUE OF THE AMX SECURITIES OR OUR SOLVENCY. THE AMX SECURITIES MAY NOT BE OFFERED OR SOLD IN MEXICO ABSENT AN AVAILABLE EXCEPTION UNDER THE LEY DEL MERCADOS DE VALORES (MEXICAN SECURITIES LAW). IN ACCEPTING THE U.S. OFFER, ALL INVESTORS, INCLUDING MEXICAN CITIZENS, MUST RELY ON THEIR OWN EXAMINATION OF AMÉRICA MÓVIL.

 

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TABLE OF CONTENTS

 

         Page

Cautionary Statement Concerning Forward-Looking Statements

   1

Incorporation of Certain Documents By Reference

   1

Where You Can Find More Information

   2

Exchange Rates

   3

Questions and Answers about the U.S. Offer

   4

Summary

   14

América Móvil Selected Consolidated Financial Data

   21

Telmex Internacional Selected Consolidated Financial Data

   25

Comparative per Share Market Data

   28

Comparative Historical And Unaudited Pro Forma Per Share Data

   30

Selected Unaudited Pro Forma Condensed Combined Financial Information

   32

Risk Factors

   33

Background to the TII Offer and the CGT Offer

   37

Purpose of and our Plans after the TII Offer and the CGT Offer

   39

Recommendation of the Board of Directors of Telmex Internacional

   43

The Offers

   44

The CGT Offer and the TII Offer

   44

The TII Offer: U.S. Offer—Mexican Offer

   44

Relief Granted by the U.S. Securities and Exchange Commission

   45

Terms of the U.S. Offer

   45

Fractional Entitlements

   46

The CGT Offer

   46

Our Structure after Completion of the TII Offer and the CGT Offer

   47

Conditions to the U.S. Offer

   48

Expiration; Extension

   49

Publication of Results

   50

Procedures for Tendering in the U.S. Offer—Holders of TII L Shares and TII A Shares

   51

Procedure for Tendering in the U.S. Offer—Holders of TII ADSs

   52

Withdrawal Rights

   56

Acceptance of Tendered TII Securities and Settlement of the U.S. Offer

   56

Purchases of TII Securities after Expiration of the TII Offer

   58

Subsequent Offering Period

   60

Brokerage Fees

   60

U.S. Tax Considerations

   60

Accounting Treatment

   62

Dividend Rights

   62

Stock Exchange Listings

   62

Appraisal Rights

   62

Shareholders Approval

   62

Persons Employed, Retained, Compensated or Used

   63

Source and Amount of Funds

   64

Regulatory Matters

   65

Material Relationships among América Móvil, Telmex Internacional and our Executive Officers, Directors and Major Shareholders

   67

Unaudited Pro Forma Condensed Combined Financial Statements

   72

Notes to Unaudited Pro Forma Condensed Combined Financial Statements

   82

Information about América Móvil

   91

 

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         Page

Description of our American Depositary Shares

   93

Comparison of the Rights of Shareholders of América Móvil and Telmex Internacional

   101

Tax Consequences of Ownership of our Shares

   107

Information about Telmex Internacional

   111

Information about CGT

   113

Information about Telmex

   113

Market Information

   114

Enforceability of Civil Liabilities Against Non-U.S. Persons

   118

Exchange Controls and Other Limitations Affecting América Móvil Shareholders

   118

Legal Matters

   118

Experts

   118
Annex A:   Information Concerning the Control Persons, Directors and Executive Officers of América Móvil    A-1

 

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements. We may from time to time make forward-looking statements in our periodic reports to the U.S. Securities and Exchange Commission, or the “SEC,” on Forms 20-F and 6-K, in our annual report to shareholders, in offering circulars and prospectuses, in press releases and other written materials, and in oral statements made by our officers, directors or employees to analysts, institutional investors, representatives of the media and others. Examples of such forward-looking statements include:

 

   

projections of operating revenues, net income (loss), net income (loss) per share, capital expenditures, dividends, capital structure or other financial items or ratios;

 

   

statements of our plans, objectives or goals, including those relating to acquisitions, competition, regulation and rates;

 

   

statements about our future economic performance or that of Mexico or other countries in which we operate;

 

   

competitive developments in the telecommunications sector in each of the markets where we currently operate;

 

   

other factors or trends affecting the telecommunications industry generally and our financial condition in particular; and

 

   

statements of assumptions underlying the foregoing statements.

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. These factors, some of which are discussed under “Risk Factors,” include economic and political conditions and government policies in Mexico, Brazil or elsewhere, inflation rates, exchange rates, regulatory developments, technological improvements, customer demand and competition. We caution you that the foregoing list of factors is not exclusive and that other risks and uncertainties may cause actual results to differ materially from those in forward-looking statements.

Forward-looking statements speak only as of the date they are made. We do not undertake any obligation to update such statements in light of new information or future developments.

You should evaluate any statements made by us in light of these important factors.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

This prospectus incorporates important business and financial information about us and Telmex Internacional that is not included in or delivered with the prospectus. The SEC allows us to “incorporate by reference” the information we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus, and certain later information that we file with the SEC will automatically update and supersede this information. We incorporate by reference the following documents:

 

   

our annual report on Form 20-F for the year ended December 31, 2009, filed with the SEC on May 25, 2010 (SEC File No. 001-16269), which we refer to as the “América Móvil 2008 Form 20-F”;

 

   

our report on Form 6-K, filed with the SEC on April 30, 2010 (SEC File No. 001-16269) containing our interim financial information for the three-month period ended March 31, 2010;

 

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any of our future annual reports on Form 20-F filed with the SEC after the date of this prospectus and prior to the termination of the exchange offer;

 

   

any of our future reports on Form 6-K that we file with the SEC after the date of this prospectus and prior to the termination of the exchange offer that are identified in such reports as being incorporated by reference in this prospectus;

 

   

Telmex Internacional’s annual report on Form 20-F for the year ended December 31, 2009, filed with the SEC on May 26, 2010 (SEC File No. 001-34086), which we refer to as the “Telmex Internacional 2009 Form 20-F”;

 

   

Telmex Internacional’s report on Form 6-K, filed with the SEC on May 3, 2010 (SEC File No. 001-34086) containing Telmex Internacional’s interim financial information for the three-month period ended March 31, 2010;

 

   

any of Telmex Internacional’s future annual reports on Form 20-F filed with the SEC after the date of this prospectus and prior to the termination of the exchange offer;

 

   

Telmex’s report on Form 6-K filed with the SEC on March 24, 2010 (SEC File No. 001-32741) containing Telmex’s audited consolidated financial statements as of December 31, 2008 and 2009 and for each of the years ended December 31, 2007, 2008 and 2009; and

 

   

Telmex’s report on Form 6-K, filed with the SEC on April 30, 2010 (SEC File No. 001-32741) containing Telmex’s interim financial information for the three-month period ended March 31, 2010.

In addition, any future reports on Form 6-K or Form 20-F that we furnish to or file with the SEC after the date of the initial filing of the registration statement to which this prospectus relates and prior to effectiveness of the registration statement and that are identified in such reports as being incorporated by reference in this prospectus, shall be deemed to be incorporated by reference in this prospectus.

Any statement contained in the América Móvil 2009 Form 20-F shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.

You may request a copy of any and all of the information that has been incorporated by reference in this prospectus and that has not been delivered with this prospectus, at no cost, by writing or telephoning us at Lago Alberto 366, Edificio Telcel I, Piso 2, Colonia Anáhuac, 11320, México D.F., México, Attention: Investor Relations, telephone (5255) 2581-4449. To obtain delivery, investors must request this information no later than five business days before the date they must make their investment decision.

WHERE YOU CAN FIND MORE INFORMATION

This prospectus is part of a registration statement of the AMX L Shares, including in the form of ADSs, that we have filed with the SEC on Form F-4 under the Securities Act. This prospectus does not contain all of the information set forth in the registration statement. Statements made in this prospectus as to the contents of any contract, agreement or other document are not necessarily complete. We have filed certain of these documents as exhibits to our registration statement, and we refer you to those documents. Each statement in this prospectus relating to a document filed as an exhibit is qualified in all respects by the filed exhibit.

We file or furnish reports, including annual reports on Form 20-F and reports on Form 6-K, and other information with the SEC pursuant to the rules and regulations of the SEC that apply to foreign private issuers. You may read and copy any materials filed with the SEC at its Public Reference Room at 100 F Street, N.E.

 

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Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Any filings we make electronically will be available to the public over the Internet at the SEC’s website at www.sec.gov.

EXCHANGE RATES

Mexico has a free market for foreign exchange, and the Mexican government allows the Mexican peso to float freely against the U.S. dollar. There can be no assurance that the Mexican government will maintain its current policies with regard to the Mexican peso or that the Mexican peso will not depreciate or appreciate significantly in the future.

The following table sets forth, for the periods indicated, the high, low, average and period-end noon buying rate in New York City for cable transfers in Mexican pesos published by the Federal Reserve Bank of New York, expressed in Mexican pesos per U.S. dollar. The rates have not been restated in constant currency units and therefore represent nominal historical figures.

 

Period

   High    Low    Average(1)    Period End

2005

   11.4110    10.4135    10.8680    10.6275

2006

   11.4600    10.4315    10.9023    10.7995

2007

   11.2692    10.6670    10.9253    10.9169

2008

   13.9350    9.9166    11.2124    13.8320

2009

   15.4060    12.6318    13.5777    13.0576

2010

           

January

   13.0285    12.6500    12.8096    13.0285

February

   13.1940    12.7987    12.9396    12.8535

March

   12.7410    12.3005    12.5673    12.3005

April

   12.4135    12.1556    12.2396    12.2281

 

(1) Average of month-end rates.

On May 21, 2010, the noon buying rate was Ps. 12.9701 to U.S.$1.00.

Fluctuations in the exchange rate between the Mexican peso and the U.S. dollar affect the U.S. dollar equivalent of the Mexican peso price of our shares on the Mexican Stock Exchange (Bolsa Mexicana de Valores, S.A.B. de C.V., or the “Mexican Stock Exchange”) and, as a result, can also affect the market price of the ADSs. Fluctuations in exchange rates will also affect the U.S. dollar amount received by tendering holders of TII Securities electing to receive cash.

This prospectus contains translations of various Mexican peso amounts into U.S. dollars at specified rates solely for your convenience. You should not construe these translations as representations by us that the nominal peso or constant peso amounts actually represent the U.S. dollar amounts or could be converted into U.S. dollars at the rate indicated. Unless otherwise indicated, we have translated U.S. dollar amounts from constant Mexican pesos at the exchange rate of Ps. 12.9701 to U.S.$1.00, which was the noon buying rate on May 21, 2010 in New York City for cable transfer in Mexican pesos published by the Federal Reserve Bank of New York.

References herein to “Mexican pesos” or “Ps.” are to Mexican pesos, references to “U.S. dollars” or “U.S.$” are to United States dollars.

For purposes of the TII Offer, a “business day” means any day on which the principal offices of the U.S. Securities and Exchange Commission are open to accept filings and consists of the time period from 12:01 a.m. through 12:00 midnight, New York City time.

 

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QUESTIONS AND ANSWERS ABOUT THE U.S. OFFER

 

Q: Why are we making the U.S. Offer?

 

A: The purpose of this offer (the “U.S. Offer”) is to acquire, directly or indirectly, substantially all the issued and outstanding shares of Telmex Internacional in order to combine our wireless communications services with Telmex Internacional’s voice, data and video transmission, Internet access and other telecommunications services in Brazil, Colombia and the other Latin American countries other than Mexico where both companies conduct operations. We believe that we would be in a position to offer integrated telecommunications services to our customers in those countries in Latin America in which both we and Telmex Internacional operate, regardless of the technological platform that generates the demand at any given time. We expect the business combination to permit a more efficient use of the companies’ networks and information systems, and would enable us to offer more integrated and universal services to our customers.

 

Q: Are any other offers to acquire shares of Telmex Internacional being made by us in connection with this offer?

 

A: Yes. In addition to the U.S. Offer, we are making a separate offer in Mexico to holders of TII L Shares or TII A Shares (the “Mexican Offer”). The U.S. Offer and the Mexican Offer (together the “TII Offer”) are being conducted simultaneously and, in all material respects, have the same terms and are subject to the same conditions.

 

     In addition to the TII Offer, we are making a separate concurrent offer for all of the outstanding shares of CGT, including in the form of ADSs (the “CGT Offer”). CGT is a Mexican holding company that is the majority shareholder of Telmex Internacional. The TII Offer is conditioned upon the completion of the CGT Offer. This prospectus relates only to the TII Offer and not the CGT Offer. The conditions to the CGT Offer are substantially similar to the conditions to the TII Offer except that the CGT Offer is not conditioned on the consummation of the TII Offer. See “The Offers—Conditions to the U.S. Offer.” CGT has announced that it will not tender any of its TII Securities in the TII Offer. However, we expect to acquire indirect ownership of the TII Securities owned by CGT through the CGT Offer.

 

Q: What would I receive in exchange for my TII L Shares, TII A Shares and TII ADSs?

 

A: For each TII L Share or TII A Share that you validly tender and do not properly withdraw prior to the expiration of this offer, you will receive, at your election, either (1) Ps. 11.66 in cash, to be paid in U.S. dollars (estimated at U.S.$0.90, based on the exchange rate on May 21, 2010) or (2) 0.373 AMX L Shares.

 

     For each TII L ADS or TII A ADS that you validly tender and do not properly withdraw prior to the expiration of this offer, you will receive, at your election, either (1) Ps. 233.20 in cash, to be paid in U.S. dollars (estimated at U.S.$17.98, based on the exchange rate on May 21, 2010) or (2) 0.373 AMX L ADSs.

 

     Fractions of AMX L Shares or AMX L ADSs will not be issued to persons whose TII Securities are exchanged in the U.S. Offer. See “The Offers—Terms of the U.S. Offer—Fractional Entitlements.”

 

Q: Will I receive my cash consideration, if any, in U.S. dollars or Mexican pesos?

 

A:

Cash consideration in the U.S. Offer to tendering holders of TII Securities that elect to receive cash will only be paid in U.S. dollars. The cash consideration will first be paid by América Móvil to Banco Inbursa S.A. Institución de Banca Múltiple, Grupo Financiero Inbursa (“Banco Inbursa”), as custodian, in Mexican pesos after the expiration of the U.S. Offer. The custodian will then arrange for the conversion of the

 

 

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  consideration into U.S. dollars, net of fees and expenses, using the U.S. dollar / Mexican peso spot market on the day it receives the cash consideration in Mexican pesos. The custodian will transfer the U.S. dollars to the exchange agent. The exchange agent will then pay the net proceeds of that conversion in U.S. dollars to the tendering holders of the TII Securities that elect to receive cash.

 

     If you hold TII L Shares or TII A Shares and you wish to receive Mexican pesos, you must tender your TII Shares in the Mexican Offer. If you hold TII A ADSs or TII L ADSs and you wish to receive Mexican pesos, you must surrender your TII ADSs to J.P. Morgan Chase Bank N.A., the depositary for the TII ADSs (the “TII Depositary”), take delivery of the underlying TII L Shares or TII A Shares and tender those TII L Shares or TII A Shares in the Mexican Offer. You may have to pay fees and charges to the TII Depositary for cancellation of the TII ADSs and to obtain delivery of the underlying TII L Shares or TII A Shares. In addition, you would need to receive the underlying TII L Shares or TII A Shares prior to the expiration of the Mexican Offer to be able to tender those shares in the Mexican Offer. If you elect to participate in the Mexican Offer, you will not be afforded the rights and protections that are provided under the U.S. federal securities laws as they relate to tender offers, other than the anti-fraud provisions of the U.S. federal securities laws.

 

Q: Will all the TII Securities that I tender be accepted?

 

A: If the U.S. Offer is not terminated for failure to meet one of the conditions described below or for any other reason, we will accept any and all validly tendered and not properly withdrawn TII Securities and not subject such securities to proration.

 

Q: Are we engaged in any financing transactions related to the U.S. Offer, the Mexican Offer or the CGT Offer?

 

A. No. We expect to obtain the funds necessary to complete the U.S. Offer, the Mexican Offer and the CGT Offer from cash and cash equivalents on hand, supplemented if necessary by other financing available to us. See “Source and Amounts of Funds.”

 

Q: Has the board of directors of Telmex Internacional made any recommendation regarding the U.S. Offer or the Mexican Offer?

 

A: At a meeting held on March 19, 2010, the board of directors of Telmex Internacional resolved to inform Telmex Internacional shareholders that it believed the consideration offered in the TII Offer was fair, from a financial point of view, to shareholders of Telmex Internacional. In making this determination, the board of directors of Telmex Internacional took into consideration the opinion of the audit and corporate practices committee of the board of directors of Telmex Internacional and the oral opinion rendered at such meeting by Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”) to the board of directors of Telmex Internacional, and subsequently confirmed in writing, that as of that date and based upon and subject to the factors and assumptions set forth in the opinion, the consideration to be received in the TII Offer by holders of the TII Securities (other than CGT and its affiliates) was fair, from a financial point of view, to such holders. At that same meeting, each of the board members of Telmex Internacional who is a Telmex Internacional shareholder indicated that he would participate in the TII Offer under the terms announced by América Móvil and assuming that the economic and market conditions remain stable. The board of directors of Telmex Internacional has not made a recommendation to holders of TII Securities as to whether or not holders of TII Securities should participate in the TII Offer. Within ten business days of the commencement of the TII Offer, Telmex Internacional will issue a statement under Schedule 14D-9 with respect to the TII Offer.

 

 

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Q: Have any Telmex Internacional shareholders agreed to participate in the U.S. Offer and/or the Mexican Offer?

 

A: No. As discussed above, each of the board members of Telmex Internacional who is a Telmex Internacional shareholder indicated that he would participate in the TII Offer under the terms announced by América Móvil and assuming that the economic and market conditions remain stable. AT&T, Inc. has stated, in a beneficial ownership report filed with the SEC on April 30, 2010, that it intends to tender all of its TII Securities in the TII Offer in exchange for AMX L Shares.

 

Q: Have any CGT shareholders agreed to participate in the CGT Offer?

 

A: Yes. Holders of approximately 82.7% of the outstanding shares of CGT (including Carlos Slim Helú, together with his sons and daughters (the “Slim Family”) and certain affiliates) have announced that they will tender all of their shares of CGT into the CGT Offer in exchange for AMX L Shares.

 

Q: Have the shareholders of América Móvil approved the TII Offer and the CGT Offer?

 

A: Yes. At a general ordinary shareholders’ meeting held in Mexico City on March 17, 2010, the shareholders of América Móvil authorized the acquisition by América Móvil of up to all the outstanding shares of CGT and of up to all the outstanding shares of Telmex Internacional.

 

Q: How many TII Securities do we currently own?

 

A: We do not currently own any TII Securities.

 

Q: How long do I have to tender my TII Securities in the U.S. Offer?

 

A: The U.S. Offer will expire at 5:00 p.m., New York City time (4:00 p.m. Mexico City time) on June 10, 2010, unless the U.S. Offer is extended in accordance with U.S. tender offer rules. We intend for the U.S. Offer and the Mexican Offer to expire on the same date and, if either offer is extended, to similarly extend the other offer. You should be aware that Euroclear Bank S.A./N.V. (“Euroclear”) and Clearstream Banking, Société Anonyme (“Clearstream”) will establish their own earlier cut-off times and dates for receipt of instructions to ensure that those instructions will be timely received by the Depository Trust Company (“DTC”) prior to the expiration. You should contact your financial intermediary to determine any applicable cut-off times and dates for receipt of such instructions. See “The Offers—Terms of the U.S. Offer—Expiration; Extension.”

 

Q: If my TII ADSs are not immediately available, may I still tender my TII ADSs in the U.S. Offer?

 

A: Yes. If you wish to tender your TII ADSs in the U.S. Offer and your TII ADSs are not immediately available or time will not permit all required documents to reach the exchange agent before the expiration of the U.S. Offer or the procedure for book-entry transfer cannot be completed on a timely basis, you may nevertheless properly tender your TII ADSs if certain conditions are satisfied. See “The Offers—Procedure For Tendering in the U.S. Offer—Holders of TII ADSs—Guaranteed Delivery Procedures.”

 

Q: As a legal matter, can I immediately sell the AMX Securities I receive in the U.S. Offer?

 

A: Yes, provided that you are not an affiliate of either América Móvil or Telmex Internacional. If you are an affiliate, there may be restrictions on your ability to resell. The AMX L Shares are listed on the Mexican Stock Exchange and on the Mercado de Valores Latinoamericanos en Euros (LATIBEX). The AMX L ADSs are listed on the New York Stock Exchange and on the Frankfurter Wertpapierbörse. We expect that you will be able to sell your AMX L Shares and AMX L ADSs on each stock exchange on which such shares are listed, so long as your broker or other securities intermediary has the ability to execute transactions on that exchange. See “The Offers—Stock Exchange Listings.”

 

 

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Q: How do I tender my TII A ADSs and TII L ADSs in the U.S. Offer?

 

A: If you hold your TII ADSs through a financial intermediary, you should instruct your financial intermediary through which you hold your TII ADSs to arrange for a DTC participant holding the TII ADSs in its DTC account to tender your TII ADSs to the DTC account of the exchange agent through the book-entry transfer facilities of DTC, together with an agent’s message acknowledging that the tendering holder has received and agrees to be bound by the letter of transmittal and the U.S. Offer document, before the expiration of the U.S. Offer. See “The Offers—Procedures for Tendering in the U.S. Offer—Holders of TII ADSs.”

 

     If you are a registered holder of TII L ADSs or TII A ADSs in physical certificate form evidenced by an American Depositary Receipt (ADR) you may tender your TII ADSs to the exchange agent by delivering to the exchange agent a properly completed and duly executed letter of transmittal, with any applicable signature guarantees from an eligible guarantor institution, together with the TII American Depositary Receipt certificates evidencing your TII ADSs before the expiration of the U.S. Offer.

 

     If you are a registered holder of TII L ADSs or TII A ADSs in uncertificated book-entry form on the books of the TII Depositary through Direct Registration, the TII Global Invest Direct Plan or otherwise on the books of the TII Depositary, you may tender your TII ADSs to the exchange agent by delivering to the exchange agent a properly completed and duly executed letter of transmittal, with any applicable signature guarantees from an eligible guarantor institution before the expiration of the U.S. Offer.

 

Q: How do I tender my TII L Shares and TII A Shares in the U.S. Offer?

 

A: If you are a U.S. resident and you are either a registered holder or beneficial owner on the books and records of Indeval of TII L Shares or TII A Shares and you wish to tender your TII L Shares or TII A Shares in the U.S. Offer, you must do so by book-entry transfer as described under “The Offers—Procedures for Tendering in the U.S. Offer—Holders of TII L Shares and TII A Shares.” You will not be able to tender in the U.S. Offer any TII L Shares or TII A Shares in certificated form. If you hold TII L Shares or TII A Shares in certificated form you should promptly contact any broker, dealer, bank, trust company, financial institution or other nominee who is a participant in the book-entry transfer system of S.D. Indeval Institución para el Depósito de Valores, S.A. de C.V. (“Indeval”) and arrange for such a nominee to hold the TII L Shares or TII A Shares on your behalf in book-entry form. You may have to pay fees and charges in connection with this process.

 

     Any broker, dealer, bank, trust company or other nominee acting on your behalf that is a participant in Indeval may make delivery of TII L Shares or TII A Shares by causing Indeval to transfer such TII L Shares or TII A Shares into the Indeval account of Inversora Bursátil, S.A. de C.V.; Account number: 010202501; for forwarding to Banco Inbursa, S.A.; Account number: 28723-5, for the account of The Bank of New York Mellon, as the exchange agent, in accordance with the procedures of Indeval. In order to effect a tender of the TII L Shares or TII A Shares you own directly or beneficially, you should promptly contact your nominee and instruct it to tender such TII L Shares or TII A Shares. If you hold your TII L Shares or TII A Shares through a broker, dealer, bank, trust company or other nominee who is not an Indeval participant, such nominee, on your behalf, should promptly contact an Indeval participant and make arrangements for the tender of the TII L Shares or TII A Shares into the Indeval account of Inversora Bursátil, S.A. de C.V.; Account number: 010202501; for forwarding to Banco Inbursa, S.A.; Account number: 28723-5, for the account of The Bank of New York Mellon, as the exchange agent, in accordance with the procedures of Indeval., on or prior to the expiration of the U.S. Offer.

 

    

A valid tender will be deemed to have been received only if (i) the exchange agent receives a confirmation from Banco Inbursa, as the custodian, of a book-entry transfer before expiration of the U.S. Offer of the TII L Shares or TII A Shares into the Indeval account at Inversora Bursátil for the account of the exchange

 

 

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  agent and (ii) the Indeval participant through which such TII L Shares or TII A Shares were tendered delivers before the expiration of the U.S. Offer a duly completed and executed U.S. Form of Acceptance to the exchange agent. The book-entry transfer confirmation must be received by the exchange agent in accordance with the terms and conditions of the U.S. Offer by 5:00 p.m. New York time on June 10, 2010.

 

     Any TII L Shares or TII A Shares being tendered must be delivered in accordance with the procedures described in this prospectus on or before the expiration of the U.S. Offer. There will be no guaranteed delivery procedures permitting delivery of the TII L Shares or TII A Shares after the expiration.

 

Q: Will I have to pay brokerage fees?

 

A: Neither we nor the exchange agent for the U.S. Offer will charge any brokerage fee in connection with the U.S. Offer. However, you should check with any broker, dealer, bank, trust company, custodian or other securities intermediary through which you hold your TII Securities as to whether it will charge any transaction fee in connection with your tender. We will not pay any such fees.

 

Q: Can I change my mind after I tender my TII Securities?

 

A: Yes. You may withdraw your tendered TII Securities at any time as long as the withdrawal notice is received before the expiration of the U.S. Offer, including any period for which it is extended. See “The Offers—Withdrawal Rights.”

 

Q: When will I know the results of the TII Offer?

 

A: We will issue a press release announcing the results of the TII Offer promptly after the expiration date.

 

Q: How and when will I receive my cash, AMX L ADSs or AMX L Shares?

 

A: Tendering shareholders who elect a cash payment will receive cash approximately 6 business days after the expiration date of the U.S. Offer. The cash consideration to be paid in the U.S. Offer to tendering holders of TII Securities will first be paid by América Móvil to Banco Inbursa, as custodian, in Mexican pesos. The custodian will then arrange for the conversion of the consideration into U.S. dollars, net of fees and expenses, using the U.S. dollar / Mexican peso spot market. The custodian will transfer the U.S. dollars to the exchange agent. The exchange agent will then pay the net proceeds of that conversion in U.S. dollars to the former holders of TII L Shares, TII A Shares and TII ADSs validly tendered for cash.

 

     If you tender your TII L ADSs and/or TII A ADSs for AMX L ADSs by means of DTC’s book-entry confirmation facilities, the exchange agent will deliver the applicable number of AMX L ADSs to DTC, which will further allocate the appropriate number of AMX L ADSs to the account of the DTC participant who tendered the TII L ADSs and/or TII A ADSs on your behalf. If you tender your TII L ADSs and/or TII A ADSs for AMX L ADSs to the exchange agent by means of delivery of ADRs, together with a completed and signed ADS Letter of Transmittal or by means of a ADS Letter of Transmittal for ADSs in uncertificated form held through Direct Registration, in the TII Global Invest Direct Plan or otherwise on the books of the TII Depositary, the exchange agent will cause the applicable number of whole AMX L ADSs to be registered in your name on the books of The Bank of New York Mellon, as the América Móvil depositary, in uncertificated form and The Bank of New York Mellon, as the América Móvil depositary, will send you a Direct Registration statement confirming that registration and the number of AMX L ADSs registered in your name.

 

     If you caused a valid tender of your TII A Shares and/or your TII L Shares for AMX L Shares through an Indeval participant, the exchange agent will instruct Banco Inbursa, as custodian, to cause the applicable number of AMX L Shares to be delivered to each Indeval participant for which a valid tender was received.

 

 

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     In addition, the exchange agent will aggregate the fractional AMX L Shares and AMX L ADSs to which tendering holders of TII Securities are entitled, execute a sale and deliver the net proceeds in U.S. dollars on a pro rata basis.

 

Q: If I decide not to tender, what will happen to my TII A Shares and TII L Shares after the completion of the TII Offer?

 

A: If you do not tender your TII Securities, you will remain a shareholder of Telmex Internacional or a holder of TII ADSs. After the completion of the TII Offer, the number of TII Securities remaining in public circulation may be so small that there may no longer be an active trading market for the TII L Shares or TII A Shares in Mexico or the TII ADSs in the United States.

 

     The TII L Shares and TII A Shares will continue to trade on the Mexican Stock Exchange unless (a) the Mexican National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores, or “CNBV”) authorizes the cancellation of the registration of the TII Shares in the National Securities Registry (Registro Nacional de Valores) of the CNBV (“deregistration”) and (b) the Mexican Stock Exchange effects the delisting of the TII L Shares and the TII A Shares. The Mexican Securities Law provides that the CNBV shall authorize deregistration and delisting if the interests of minority shareholders and the market in general have been adequately protected. Under Mexican law, among other conditions, we would be required to obtain approval of the holders of at least 95% of the outstanding TII Shares (with all series voting as a single class), including any TII Shares we acquire in the TII Offer or otherwise, voting at a shareholders meeting to approve resolutions permitting deregistration and delisting. If we do not reach the 95% ownership level immediately following consummation of the TII Offer, we may pursue other transactions in the future that would increase our direct and indirect ownership to that level. We do not have any current intention to engage in such transactions or as to the terms and conditions of any such transaction, although we expect to evaluate potential future transactions based on our ownership level and the other facts and circumstances in existence following the TII Offer.

 

     If the applicable legal requirements for deregistration and delisting are met following the consummation of the TII Offer, we intend to take the steps necessary to obtain such approval and to seek the authorization of the CNBV for deregistration and delisting. However, the primary purpose of the TII Offer and the CGT Offer is to acquire (directly and indirectly through CGT) up to 100% of the outstanding shares of Telmex Internacional. Only after completion of the offers and complying with applicable legal requirements and obtaining necessary corporate authorizations, would we then seek the authorization of the CNBV for deregistration and delisting.

 

     Even if the shareholders of Telmex Internacional do approve deregistration and delisting by a vote of 95% or more of the TII Shares, it is possible that the CNBV would not provide the necessary authorization. In that case, Telmex Internacional will continue to be a registered public company in Mexico and the TII Shares will remain listed on the Mexican Stock Exchange.

 

     We cannot provide any assurances that any deregistration and delisting of the TII Shares will occur in Mexico or as to the timing of any such deregistration and delisting.

 

Q: If I decide not to tender, what will happen to my TII ADSs after the completion of the TII Offer and the CGT Offer?

 

A: If Telmex Internacional obtains deregistration and delisting in Mexico, we also intend to cause Telmex Internacional to take the steps necessary to delist the TII ADSs from the NYSE, terminate the deposit agreements for the TII ADSs and terminate the registration of the TII L Shares and the TII A Shares under the Exchange Act.

 

    

Even if Telmex Internacional does not obtain deregistration and delisting in Mexico, we may decide to cause Telmex Internacional to delist from the NYSE, terminate the deposit agreements and deregister under

 

 

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  the Exchange Act. We may make this decision separately (a) for the TII L Shares and TII L ADSs and (b) for the TII A Shares and TII A ADSs. The decision would depend on the results of the TII Offer and any additional subsequent purchases, and on our management’s evaluation of the public float, trading volumes and liquidity of the TII ADSs after completion of the TII Offer.

 

Q: Am I entitled to any appraisal rights?

 

A: Holders of TII Securities are not entitled under Mexican law or otherwise to appraisal rights with respect to the TII Offer. See “Risk Factors—If you do not tender in the TII Offer, you may remain a shareholder of Telmex Internacional and there may not be a liquid market for the TII Securities,” “The Offers—Purchases of TII Shares After Expiration of the TII Offer” and “The Offers—Appraisal Rights.”

 

Q: Does the TII Offer provide for a subsequent offering period?

 

A: We may elect, at our sole discretion, to have a subsequent offering period in the United States of at least three business days that would start immediately following the expiration of the TII Offer.

 

     During the subsequent offering period, if one is provided, remaining holders of TII Securities may tender, but not withdraw, their TII Securities not previously tendered. TII Securities previously tendered and accepted for exchange in the U.S. Offer will not have the benefit of any further withdrawal rights. A subsequent offering period, if one is provided, will not affect the timing of the acceptance and delivery of TII Securities previously tendered and accepted for exchange or purchase in the U.S. Offer, as described above under “—Acceptance of Tendered TII Securities.”

 

     As mentioned above, holders of TII Securities that tender their TII Securities during any subsequent offering period will not have withdrawal rights, and we will accept for exchange or purchase any TII Securities validly tendered during any subsequent offering period immediately and will promptly pay or deliver AMX Securities in exchange for any TII Securities tendered for exchange or purchase. The consideration paid during any subsequent offering period will be the same consideration offered in the initial offer period.

 

Q: Will there be any additional offers made by América Móvil for the TII Shares?

 

A: Under certain circumstances, the CNBV may require as a condition to obtaining deregistration and delisting in Mexico that Telmex Internacional establish a trust (fideicomiso) holding AMX L Shares and cash sufficient to purchase any TII Shares that remain outstanding following completion of the TII Offer (the “TII Repurchase Trust”). An offer through the TII Repurchase Trust would be made in compliance with then applicable Mexican and United States legal requirements. The TII Repurchase Trust would offer to purchase TII Shares for a period of six months from the date that the registry of the TII Shares is cancelled.

 

     If the size of the public float after the TII Offer is greater than 300,000 unidades de inversión (investment units or “UDIs”) (Ps. 1,337,637 as of April 26, 2010), we may be required by the CNBV to make an additional offer for TII Securities. The consideration offered by us as part of any such additional offer under applicable Mexican law would be the greater of the trading price of the TII Securities and their book value. We may be able to offer a different price in any such additional offer, subject to prior approval from the CNBV, based upon Telmex Internacional’s financial condition and prospects at the time and after approval of such price by Telmex Internacional’s board of directors, taking into consideration the opinion of its Audit and Corporate Practices Committee in accordance with Mexican law. Any such consideration may be different than that offered in the TII Offer.

 

     The circumstances that would lead to the establishment of the TII Repurchase Trust, or to our making an additional offer for TII Securities, may not arise or may occur only after significant delays. There can accordingly be no assurance that there will be a TII Repurchase Trust or that we will make an additional offer or as to the timing of any TII Repurchase Trust or any such additional offer.

 

 

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     After completion of the TII Offer, we or Telmex Internacional may also acquire TII Securities, including by means of open market purchases or privately negotiated purchases.

 

Q: Do we require any approvals from any governmental authorities in order to acquire TII Securities or to issue AMX Securities pursuant to the TII Offer?

 

A: Yes. The consummation of the TII Offer is subject to a number of Mexican domestic and United States and other foreign antitrust, banking, securities and other regulatory approvals. See “Regulatory Matters.” As of the date of this prospectus, certain of these approvals and confirmations, including with respect to securities matters, have not yet been received. While we currently expect that all necessary approvals will be received and remain in force by the expiration date, it is possible that not all necessary approvals will be in force by that date. If that happens, the offer may be terminated or extended, and we will issue a press release describing how the TII Offer will be affected.

 

Q: What will be the accounting treatment of the TII Offer?

 

A: Under Mexican FRS and U.S. GAAP, we will account for the acquisition of control of Telmex Internacional through the CGT Offer as a combination of entities under common control, and the TII Offer as a purchase of non-controlling interest. See “The Offers—Accounting Treatment.”

 

Q: Will a United States holder be taxed on the AMX L Shares, AMX L ADSs or cash it receives?

 

A: It is the opinion of Cleary Gottlieb Steen & Hamilton LLP (“CGSH”) that the TII Offer together with the CGT Offer should be treated as a single, integrated transaction that is described in Section 351 of the Internal Revenue Code and a U.S. Holder that receives solely AMX Securities in exchange for TII Securities should not recognize gain or loss upon such exchange (except with respect to cash received with respect to a fractional AMX L Share or AMX L ADS). Accordingly, (i) the aggregate tax basis of the AMX Securities received by the U.S. Holder should be the same as the aggregate tax basis of the TII Securities surrendered pursuant to the TII Offer (adjusted with respect to fractional shares) and (ii) the holding period of the AMX Securities should include the holding period of the TII Securities surrendered pursuant to the TII Offer. This opinion is based on certain representations that CGSH has received from América Móvil and on certain assumptions, which we believe are reasonable, including the assumption that the Slim Family and certain related entities and AT&T will tender all their TII Securities in the TII Offer and all their CGT shares in the CGT Offer, and will elect to receive AMX Securities in exchange for all their TII Securities, and will elect to receive AMX Securities in exchange for all their CGT shares.

 

     If a U.S. Holder elects to receive both cash and AMX Securities in exchange for its TII Securities, gain but not loss should be recognized equal to the lesser of (a) the U.S. dollar value of any cash consideration received and (b) the amount by which the sum of the fair market value of the AMX Securities received pursuant to the U.S. Offer (including cash received from the sale of fractional entitlements of AMX Securities) and the U.S. dollar value of any cash consideration received exceeds the U.S. Holder’s aggregate tax basis of the TII Securities surrendered (adjusted with respect to fractional shares).

 

     In the event that the TII Offer together with the CGT Offer were not a single, integrated transaction described in Section 351 of the Internal Revenue Code, the exchange of TII Securities for AMX Securities will be a taxable exchange for U.S. federal income tax purposes, and U.S. holders of TII Securities whose TII Securities are exchanged in the TII Offer will generally recognize gain or loss on the exchange of TII Securities for AMX Securities equal to the difference between (x) the sum of the fair market value of the AMX Securities received pursuant to the TII Offer (including cash received from the sale of fractional entitlements of AMX Securities) and (y) the U.S. holder’s adjusted tax basis in the TII Securities.

 

 

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     The exchange of TII Securities for solely cash (rather than AMX Securities) will be a taxable transaction for U.S. federal income tax purposes. Accordingly, a U.S. Holder that receives cash in exchange for its TII Securities will generally recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference between (x) the U.S. dollar value of any cash consideration received and (y) the U.S. Holder’s adjusted tax basis in the TII Securities exchanged.

 

Q: Is América Móvil’s financial condition relevant to my decision to tender my TII Securities in the TII Offer?

 

A: Yes. If the TII Offer is consummated and if you so elect, you will receive AMX L Shares or AMX L ADSs as consideration in the offer and you should consider our financial condition before you decide to become one of our shareholders through the TII Offer. In considering our financial condition, you should review the documents incorporated by reference in this prospectus and the pro forma financial information included in this prospectus because they contain detailed business, financial and other information about us.

 

Q: If I tender my TII Securities for AMX Securities, how will my rights as a shareholder change?

 

A: If the TII Offer is consummated and if you so elect, you will receive either AMX L Shares or AMX L ADSs as consideration in the TII Offer. The rights of holders of TII L Shares and the rights of holders of AMX L Shares are substantially equivalent. There are differences between the voting rights of holders of TII A Shares, on the one hand, and the rights of shareholders of AMX L Shares, on the other hand. In particular, holders of TII A Shares are entitled to vote as a combined class with holders of TII Series AA Shares (“TII AA Shares”) for a majority of Telmex Internacional’s directors and on all matters presented to shareholders, although they are not entitled to elect any directors as a class and the TII A Share can never constitute more than 49% of the combined voting power of the TII A Shares and the TII AA Shares. Holders of AMX L Shares are entitled to vote as a separate class to elect two members of the América Móvil board of directors and as a combined class with all América Móvil shares on certain specified matters. These differences are explained in “Comparison of the Rights of Shareholders of América Móvil and Telmex Internacional” in this prospectus.

 

Q: When will I begin to receive dividends on the AMX Securities I acquire in the TII Offer?

 

A: If you elect to receive AMX Securities pursuant to the terms of the TII Offer, you will receive any dividends that have a record date that falls after the date in which the exchange agent delivers AMX Securities or cash (the “settlement date”) for the TII Offer.

 

Q: Are there any conditions to our obligation to complete the U.S. Offer?

 

A: Yes. We will not be required to accept any TII Securities for purchase or exchange, or pay for or exchange any TII Securities, that have been tendered pursuant to this offer if any of the following events or circumstances have occurred and are continuing (and have not (to the extent legally permissible) been expressly waived by us):

 

   

any legal prohibition on the consummation of, or the participation by any shareholder in, the TII Offer has been instituted or threatened and is continuing;

 

   

any waiver, consent, extension, approval, action or nonaction from any governmental, public, judicial, legislative or regulatory authority or agency or other party which is necessary to consummate, or for a shareholder to participate in, the TII Offer and the other transactions contemplated by us 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 limitation on the participation by any holder in the TII Offer, in either case unacceptable to us, in our reasonable judgment;

 

 

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any change (or any condition, event or development involving a prospective change) shall have occurred or been threatened in the business, properties, assets, liabilities, capitalization, shareholders’ equity, condition (financial or otherwise), operations, licenses, franchises, permits, permit applications, results of operations, cash flows or prospects of Telmex Internacional or any of its subsidiaries which, in our reasonable judgment, is or may be materially adverse to Telmex Internacional or any of its subsidiaries, or we shall have become aware of any fact which, in our reasonable judgment, has or may have material adverse significance with respect to either the value of Telmex Internacional or any of its subsidiaries or the value of the TII Securities;

 

   

there shall have occurred or been threatened (1) any general suspension of trading in, or limitation on prices for, securities on any national securities exchange or in the over-the-counter market, any decline in either the Dow Jones Industrial Average or the Standard & Poors Index of 500 Industrial Companies by an amount in excess of 10% measured from the close of business on the last trading day before the commencement of the U.S. Offer, or any material adverse change in prices generally of shares on the NYSE, (2) any general suspension of trading in, or limitation on prices for, securities on any national securities exchange or in the over-the-counter market, any decline in either the IPC (Índice de Precios y Cotizaciones) or the INMEX (Índice México) by an amount in excess of 10% measured from the close of business on the last trading day before the date of the U.S. Offer, or any material adverse change in prices generally of shares on the Mexican Stock Exchange, (3) a declaration of a banking moratorium or any suspension of payments in respect of banks by federal or state authorities in the U.S. or Mexico (whether or not mandatory), (4) any limitation (whether or not mandatory) by any governmental authority or agency on, or other event which, in the reasonable judgment of América Móvil, might affect the extension of credit by banks or other lending institutions, (5) a commencement or escalation of a war, armed hostilities or terrorist event or other national or international crisis directly or indirectly involving the U.S. or Mexico, (6) any significant change in U.S., Mexican or any other currency exchange rates or any suspension of, or limitation on, the markets therefore (whether or not mandatory), or (7) in the case of any of the foregoing existing at the time of the commencement of the U.S. Offer, a material acceleration or worsening thereof;

 

   

the conditions precedent to the Mexican Offer (which are substantially similar to the conditions precedent to the U.S. Offer) have not been satisfied or waived; or

 

   

we have not acquired in the CGT Offer at least 51% of the outstanding shares of CGT; provided, however, that we will exercise this condition only if it is not satisfied due to regulatory impediments on the ability of CGT shareholders to participate in the CGT Offer which are outside of their control and not solely due to a voluntary determination by the CGT shareholders.

 

     See “The Offer—Conditions to the U.S. Offer.”

 

Q: Who can help answer my questions about this offer?

 

A: If you have any questions about this offer, or if you would like additional copies of this prospectus, you can contact the information agent, D.F. King & Co., Inc., by phone at 212-269-5550 (for banks and brokers), 800-735-3591 (for all others—toll free) or via e-mail at amx@dfking.com.

 

 

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SUMMARY

This summary highlights selected information from this prospectus. It does not contain all of the information that is important to you. To understand the U.S. Offer fully and for a complete description of the terms of this offer, you should read carefully the entire prospectus and the additional documents referred to in this prospectus. You can also find out about obtaining more information about this offer in the section entitled “Where You Can Find More Information.”

The Companies

América Móvil

We are 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 9.7 million wireless subscribers, over 2.3 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

 

 

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provide fixed-line and broadband services in the Dominican Republic under the “Codetel” brand and wireless services under the “Claro” brand.

 

   

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.

We are 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.

Telmex Internacional

Telmex Internacional 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.

Telmex Internacional’s principal business is in Brazil, which accounts for nearly 80% of its total revenues. Telmex Internacional 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 Telmex Internacional’s business by geographic market:

 

   

Brazil. Through Embratel, Telmex Internacional 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, Telmex Internacional 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, Telmex Internacional offers triple play services in Brazil, with a network that covers approximately 10.8 million homes.

 

   

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

 

   

Argentina. In Argentina, Telmex Internacional 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. Broadband Internet and telephone access through WiMax in the 3.5 GHz frequency and GPON access technologies to service small- to medium-sized businesses.

 

   

Chile. In Chile, Telmex Internacional provides 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 to the small- and medium-sized business segment as well as to corporate customers. Telmex Internacional services the

 

 

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residential market as well with long-distance telephone services, broadband, local telephony and pay cable and digital satellite television. Telmex Internacional’s nationwide wireless network in the 3.4-3.6 GHz frequency employs WiMax technology.

 

   

Peru. In Peru, Telmex Internacional 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, Telmex Internacional has a network that passes approximately 300,000 homes. Telmex Internacional recently began offering wireless telephony using CDMA 450 MHz technology in the interior provinces of the country. Telmex Internacional also employs a WiMax platform in the 3.5 GHz frequency.

 

   

Yellow pages. Telmex Internacional’s yellow pages business operates in five countries and it publishes a total of 179 directories. Of these, 124 directories are in Mexico with presence in all of the states and Mexico City, 36 directories are in 23 states of the United States with particular focus on Hispanic 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. Telmex Internacional 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.

 

   

Uruguay. In Uruguay, Telmex Internacional provides data solutions, Internet access, international long-distance, data center services and international managed voice, data and video services to corporate and residential customers.

Telmex Internacional, S.A.B. de C.V. 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 Telmex Internacional at this location is 52 (55) 5223-3200.

Carso Global Telecom

CGT is a holding company the principal assets of which consist of shares of Telmex Internacional and shares of Teléfonos de México, S.A.B. de C.V. (“Telmex”). Based on beneficial ownership reports filed with the SEC, CGT held, directly or indirectly as of January 15, 2010, 48.7% of the outstanding Series L shares of Telmex (“TMX L Shares”), 23.3% of the outstanding Series A shares of Telmex (“TMX A Shares”) and 73.9% of the Series AA shares of Telmex (“TMX AA Shares”) (in the aggregate, 59.4% of all outstanding shares of Telmex). As of February 28, 2010, CGT owned 50.9% of the outstanding TII L Shares, 23.3% of the TII A Shares and 73.9% of Telmex Internacional’s outstanding TII AA Shares (in the aggregate, 60.7% of all outstanding shares of Telmex Internacional). These figures take into account certain forward share purchase transactions between CGT and certain financial institutions pursuant to which CGT is obligated to purchase and the financial institutions are obligated to sell TII L Shares or TMX L Shares at fixed prices. Without taking into account the TII L Shares subject to the forward share purchase transactions, CGT owned 32.0% of the outstanding Series L shares of Telmex (in the aggregate, 50.5% of all outstanding shares of Telmex) and 33.3% of the outstanding TII L Shares (in the aggregate, 51.4% of all outstanding shares of Telmex Internacional).

As of December 31, 2009, CGT’s indebtedness was Ps. 29,479 million (U.S.$2,257 million at the December 31, 2009 exchange rate), excluding the indebtedness of its consolidated subsidiaries Telmex and Telmex Internacional.

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

 

 

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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 América Móvil 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 Telmex Internacional in a second escisión.

Purpose of the TII Offer and our Plans for Telmex Internacional

The purpose of the TII Offer, in combination with the CGT Offer, is to acquire, directly or indirectly, all the issued and outstanding shares of Telmex Internacional in order to combine our wireless communications services with Telmex Internacional’s voice, data and video transmission, Internet access and other telecommunications services in Brazil, Colombia and the other Latin American countries other than Mexico where both companies conduct operations. We will also acquire a controlling interest in Telmex.

We believe that the telecommunications industry has evolved in recent years, resulting in integrated technological platforms that provide combined voice, data and video services. Also, recent developments in software applications, functionality and equipment are paving the way for a significant increase in demand for data services throughout Latin America. We believe that we would be in a position to offer integrated telecommunications services to our customers in those countries in Latin America in which both we and Telmex Internacional operate, regardless of the technological platform that generates the demand at any given time.

We believe that the business combination resulting from the TII Offer and the CGT Offer should generate synergies. We expect the business combination to permit a more efficient use of the companies’ networks and information systems, and would enable us to offer more integrated and universal services to our customers. See “Purpose of and our plans after the TII Offer and the CGT Offer.”

Summary of The Offers—the U.S. Offer

We are offering, upon the terms and subject to the conditions of this U.S. Offer, to exchange:

 

   

for each TII L Share or TII A Share that you validly tender and do not properly withdraw prior to the expiration date of the U.S. Offer:

 

   

Ps. 11.66 in cash, to be paid in U.S. dollars (estimated at U.S.$0.90, based on the exchange rate on May 21, 2010); or

 

   

0.373 AMX L Shares;

 

   

for each TII ADS that you validly tender and do not withdraw properly prior to the expiration date of the U.S. Offer:

 

   

Ps. 233.20 in cash, to be paid in U.S. dollars (estimated at U.S.$17.98, based on the exchange rate on May 21, 2010); or

 

   

0.373 AMX L ADS.

Tendering shareholders who elect a cash payment will receive cash approximately 6 business days after the expiration date of the TII Offer. The cash consideration to be paid in the U.S. Offer to tendering holders of TII Securities will first be paid by América Móvil to Banco Inbursa, as custodian, in Mexican pesos. The custodian will then arrange for the conversion of the consideration into U.S. dollars, net of fees and expenses, using the

 

 

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U.S. dollar / Mexican peso spot market. The custodian will transfer the U.S. dollars to the exchange agent. The exchange agent will then pay the net proceeds of that conversion in U.S. dollars to the former holders of TII L Shares, TII A Shares and TII ADSs validly tendered for cash.

Participating TII Security holders may elect to receive either AMX L Shares or AMX L ADSs, as applicable, or payment in cash or a combination of AMX L Shares or AMX L ADSs, as applicable, and cash. See “The Offers—Terms of the U.S. Offer.”

Fractional AMX Securities

Fractions of AMX L Shares or AMX L ADSs will not be issued to persons whose TII Securities are exchanged in the U.S. Offer. Instead, the exchange agent will aggregate the fractional AMX L Shares and AMX L ADSs, execute a sale and deliver the net proceeds in U.S. dollars on a pro rata basis. See “The Offers—Terms of the U.S. Offer—Fractional Entitlements.”

Conditions to the U.S. Offer

We will not be required to accept any TII Securities for purchase or exchange, or pay for or exchange any TII Securities, that have been tendered pursuant to this offer if certain events or circumstances set forth in this prospectus shall have occurred and are continuing (and have not been waived by us). See “The Offers—Conditions to the U.S. Offer.”

Expiration; Extension

The U.S. Offer will expire at 5:00 p.m., New York City time (4:00 p.m. Mexico City time) on June 10, 2010, unless the U.S. Offer is extended in accordance with U.S. tender offer rules. We intend for the U.S. Offer and the Mexican Offer to expire on the same date and, if either offer is extended, we intend to similarly extend the other offer. You should be aware that Euroclear and Clearstream will establish their own earlier cut-off times and dates for receipt of instructions to ensure that those instructions will be timely received by DTC prior to the expiration. See “The Offers—Terms of the U.S. Offer—Expiration; Extension.” If your TII ADSs are not available, you may also follow the guaranteed delivery procedures described in “The Offers—Procedure for Tendering in the U.S. Offer—Holders of TII ADSs—Guaranteed Delivery Procedures” below.

Risk Factors

In deciding whether to tender your TII Securities in the U.S. Offer, you should carefully consider the following risk factors:

 

   

Market fluctuations may reduce the market value of the consideration we are offering to you because the share for share exchange ratio contemplated by the U.S. Offer is fixed.

 

   

The value of the AMX L Shares, including those represented by ADSs, and the cash consideration being offered will fluctuate due to movements in exchange rates.

 

   

If you do not tender in the TII Offer, you will continue to be a minority shareholder of Telmex Internacional and there may not be a liquid market for the TII Securities.

 

   

Failure to acquire a substantial majority of the outstanding capital stock of Telmex Internacional would affect our ability to complete any post-closing reorganization of the combined company, which could reduce or delay the cost savings or revenue benefits to the combined company.

 

   

If you do not tender in the TII Offer, you may not receive any future dividends from Telmex Internacional.

 

   

We 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 and our results of operations, financial condition and the price of our shares may suffer.

 

 

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If you elect to receive AMX Securities in the TII Offer, you will receive securities with limited voting rights.

See “Risk Factors” beginning on page 33.

Regulatory Matters

We will not be obligated to purchase or exchange any tendered TII Securities pursuant to the U.S. Offer if we have 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 TII Offer and the other transactions contemplated by us 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 TII Offer, in either case unacceptable to us, in our reasonable judgment. See “The Offers—Regulatory Matters.”

Our Structure after the Completion of the TII Offer and the CGT Offer

Below is a diagram showing our organizational structure immediately after the consummation of the TII Offer and the CGT Offer, assuming all of the issued and outstanding TII Securities (other than those held by CGT) and CGT shares are purchased or exchanged pursuant to the terms of the TII Offer and the CGT Offer, respectively. The percentages below indicate the percentage of all outstanding shares of each entity.

LOGO

See “The Offers—Our Structure after the Completion of the TII Offer and the CGT Offer.”

U.S. Tax Considerations

It is the opinion of CGSH that the TII Offer together with the CGT Offer should be treated as a single, integrated transaction that is described in Section 351 of the Internal Revenue Code and a U.S. Holder that receives solely AMX Securities in exchange for TII Securities should not recognize gain or loss upon such

 

 

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exchange (except with respect to cash received with respect to a fractional AMX Share or AMX ADS). Accordingly, (i) the aggregate tax basis of the AMX Securities received by the U.S. Holder should be the same as the aggregate tax basis of the TII Securities surrendered pursuant to the TII Offer (adjusted with respect to fractional shares) and (ii) the holding period of the AMX Securities should include the holding period of the TII Securities surrendered pursuant to the TII Offer. This opinion is based on certain representations that CGSH has received from América Móvil and on certain assumptions, which we believe are reasonable, including the assumption that the Slim Family and certain related entities and AT&T will tender all their TII Securities in the TII Offer and all their CGT shares in the CGT Offer, and will elect to receive AMX Securities in exchange for all their TII Securities, and will elect to receive AMX Securities in exchange for all their CGT shares.

If a U.S. Holder elects to receive both cash and AMX Securities in exchange for its TII Securities, gain but not loss should be recognized equal to the lesser of (a) the U.S. dollar value of any cash consideration received and (b) the amount by which the sum of the fair market value of the AMX Securities received pursuant to the U.S. Offer (including cash received from the sale of fractional entitlements of AMX Securities) and the U.S. dollar value of any cash consideration received exceeds the U.S. Holder’s aggregate tax basis of the TII Securities surrendered (adjusted with respect to fractional shares).

In the event that the TII Offer together with the CGT Offer were not a single, integrated transaction described in Section 351 of the Internal Revenue Code, the exchange of TII Securities for AMX Securities will be a taxable exchange for U.S. federal income tax purposes. U.S. holders of TII Securities whose TII Securities are exchanged in the TII Offer will generally recognize gain or loss on the exchange of TII Securities for AMX Securities equal to the difference between (x) the sum of the fair market value of the AMX Securities received pursuant to the TII Offer (including cash received from the sale of fractional entitlements of AMX Securities) and (y) the U.S. holder’s adjusted tax basis in the TII Securities.

The exchange of TII Securities for solely cash (rather than of AMX Securities) will be a taxable transaction for U.S. federal income tax purposes. Accordingly, a U.S. Holder that receives cash in exchange for its TII Securities will generally recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference between (x) the U.S. dollar value of any cash consideration received and (y) the U.S. Holder’s adjusted tax basis in the TII Securities exchanged.

Accounting Treatment

Under Mexican FRS and U.S. GAAP, we will account for the acquisition of control of Telmex Internacional through the CGT Offer as a combination of entities under common control, and the TII Offer as a purchase of non-controlling interest. See “The Offers—Accounting Treatment.”

Stock Exchange Listings

The AMX L Shares are listed on the Mexican Stock Exchange and on the Mercado de Valores Latinoamericanos en Euros (LATIBEX) in Madrid, Spain. The AMX L ADSs are listed on the New York Stock Exchange and on the Frankfurter Wertpapierbörse. See “The Offers—Stock Exchange Listings.”

Appraisal Rights

The holders of TII Securities are not entitled under Mexican law or otherwise to appraisal or other similar rights with respect to the TII Offer. See “The Offers—Appraisal Rights.”

Shareholder Approvals

On March 17, 2010, the shareholders of América Móvil authorized the acquisition by América Móvil of up to all the outstanding shares of CGT and of up to all the outstanding shares of TII not directly or indirectly owned by CGT. See “The Offers—Shareholder Approval.”

 

 

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AMÉRICA MÓVIL SELECTED CONSOLIDATED FINANCIAL DATA

This prospectus incorporates by reference our 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. Our 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 our non-Mexican subsidiaries have been adjusted to conform to Mexican FRS and translated to Mexican pesos. See Note 2(a)(ii) to our 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 us, a reconciliation to U.S. GAAP of net income and total shareholder’s equity and cash flow statements for the years ended 2008 and 2007 under U.S. GAAP.

Under Mexican FRS, our 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 our financial statements through 2007. See Note 2f to our 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. We have begun presenting financial statements in accordance with IFRS for the year ended December 31, 2010, with an official IFRS adoption date as of December 31, 2010 and a transition date to IFRS of January 1, 2009. The first quarter 2010 unaudited condensed consolidated financial information incorporated by reference herein is presented based on the IFRS standards that are currently in effect, which might be different from those that are actually in effect at December 31, 2010 adoption date. Accordingly, our first quarter 2010 unaudited condensed consolidated financial information is preliminary and subject to change.

On December 13, 2006, our shareholders approved the merger of América Telecom, S.A.B. de C.V., or “Amtel,” our then controlling shareholder, and its subsidiary Corporativo Empresarial de Comunicaciones, S.A. de C.V., or “Corporativo,” with us. As a result of the merger, we 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 we have adjusted our 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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The selected financial and operating information set forth below has been derived in part from our 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, our audited consolidated financial statements and the notes thereto incorporated by reference in this prospectus.

 

     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 share and per
share 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      102,198

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

(see footnotes on following page)

 

 

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     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 share and per
share data)(2)
 

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 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 we have adjusted our 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.
(2) Except per share, share capital and subscriber data.
(3) We have 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, 2007 and 2009 include special dividends of Ps. 0.30 per share, Ps. 1.00 per share and Ps. 0.50 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 2009 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 our 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 our 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 our Mexican FRS and U.S. GAAP operating revenues include the reclassification of (1) the application of ASC 605-50, “Customer Payments and Incentives,” which we have applied to all periods presented in this table and which resulted in a reclassification of certain commissions paid to

 

 

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  distributors from commercial, administrative and general expenses under Mexican FRS to reductions in operating revenues under U.S. GAAP, and (2) the application of ASC 605-25, “Multiple Element Arrangements,” 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 our audited consolidated financial statements.
(8) Includes non-controlling interest.
(9) As of year-end.
(10) Note 2z.3 to our 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 our financial statements for 2009.
(11) Beginning in 2007, we capitalize interest under Mexican FRS.
(12) Net income and shareholder’s equity information for prior years were retrospectively adjusted for presentation and disclosure purposes, in accordance with amendments to Accounting Standards Codification (ASC) 810, Consolidation. ASC 810 states that a noncontrolling 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 noncontrolling interest.

 

 

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TELMEX INTERNACIONAL SELECTED CONSOLIDATED FINANCIAL DATA

This prospectus incorporates by reference the audited consolidated financial statements of Telmex Internacional as of December 31, 2009 and 2008 and for the years ended December 31, 2009, 2008 and 2007. Telmex Internacional’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 Telmex Internacional’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, Telmex Internacional ceased to recognize the effects of inflation on its financial information. Prior to 2008, inflation accounting had extensive effects on the presentation of Telmex Internacional’s financial statements. Telmex Internacional’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 Telmex International’s audited consolidated financial statements. In Telmex Internacional’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.

Telmex Internacional 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 Telmex Internacional in the Escisión that established Telmex Internacional. See Note 1 to Telmex Internacional’s audited consolidated financial statements.

 

 

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The selected consolidated financial data set forth below have been derived from Telmex Internacional’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, Telmex Internacional’s audited consolidated financial statements and notes thereto incorporated by reference in this prospectus.

 

     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 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.

 

 

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(2) Telmex Internacional’s results of operations in 2006 were affected by several items relating to Brazilian tax proceedings. Under commercial, general and administrative costs, Telmex Internacional 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 Telmex Internacional 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. Telmex Internacional 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 Telmex Internacional’s audited consolidated financial statements. ASC 810 states that a noncontrolling 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 noncontrolling 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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COMPARATIVE PER SHARE MARKET DATA

We announced the TII Offer and the CGT Offer on January 13, 2010 after the close of the trading markets. The following tables present the market value of the TII Securities (on an historical and equivalent per share basis) and the market value of the AMX Securities (on an historical basis) as of January 13, 2010 and May 27, 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 TII Securities and the AMX Securities. 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 TII Securities and AMX Securities.

The economic terms of the CGT Offer and the TII Offer were determined by us based on the average closing prices of the AMX L Shares, the TII L Shares and the Series L Shares of Telmex (the “TMX L Shares”) on the Mexican Stock Exchange over the ten trading days ending at January 12, 2010, the day immediately prior to the announcement of our intention to make the offers. See “The Offers—Basis for Determination of the Consideration.”

TII L Shares and AMX L Shares

The following table presents the closing market prices per share as reported on the Mexican Stock Exchange for AMX L Shares and TII L Shares as of (1) January 13, 2010 and (2) May 27, 2010.

 

     TII
L Shares
   AMX
L Shares
   TII
L Shares
     Historical    Equivalent Basis
     Shares    Shares    Shares

(a) January 13, 2010

   Ps. 11.40    Ps. 31.80    Ps.11.86

(b) May 27, 2010

     11.61      31.00    11.56

The “equivalent basis stock price” of TII 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 TII L Share.

TII A Shares and AMX L Shares

The following table presents the closing market prices per share as reported on the Bolsa Mexicana de Valores, S.A.B. de C.V. (the “Mexican Stock Exchange”) for the AMX L shares and TII A Shares as of (1) January 13, 2010 and (2) May 27, 2010.

 

     TII
A Shares
   AMX
L Shares
   TII
A Shares
     Historical    Equivalent Basis
     Shares    Shares    Shares

(a) January 13, 2010

   Ps.11.01    Ps.31.80    Ps.11.86

(b) May 27, 2010

   11.31    31.00    11.56

The “equivalent basis stock price” of TII 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 TII A Share.

 

 

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TII L ADSs and AMX L ADSs

The following table presents the closing market prices per share as reported on the New York Stock Exchange for AMX L ADSs and for TII L ADSs as of (1) January 13, 2010 and (2) May 27, 2010.

 

     TII
L ADSs
   AMX
L ADSs
   TII
L ADSs
     Historical    Equivalent Basis
     Shares    Shares    Shares

(a) January 13, 2010

   $ 17.85    $ 50.01    $ 18.65

(b) May 27, 2010

     18.08      48.40      18.05

The “equivalent basis stock price” of TII 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 TII L ADSs.

TII A ADSs and AMX L ADSs

The following table presents the closing market prices per share as reported on the New York Stock Exchange for AMX L ADSs and TII A ADSs as of (a) January 13, 2010 and (b) May 27, 2010.

 

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

(a) January 13, 2010

   $ 17.82    $ 50.01    $ 18.65

(b) May 27, 2010

     17.94      48.40      18.05

The “equivalent basis stock price” of TII 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 TII A ADSs.

 

 

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COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA PER SHARE DATA

The following comparative historical and unaudited pro-forma per share data should be read in conjunction with the audited consolidated financial statements of América Móvil, Telmex Internacional and Telmex incorporated by reference into this prospectus, and also the Unaudited Pro Forma Condensed Combined Financial Statements included elsewhere in this prospectus. The unaudited pro forma financial information below is presented using the same underlying assumptions as those used in the preparation of the Unaudited Pro Forma Condensed Combined Financial Statements. This information is presented for illustrative purposes only and is not necessarily indicative of the results of operations or financial position that would have been achieved had the TII Offer or the CGT Offer occurred on the dates assumed, nor is the information 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. Refer to further discussion in Note 2(c) of the Unaudited Pro Forma Condensed Combined Financial Statements for a range of potential dilutive cash payments in the TII offer.

 

   

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 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 per share data in 2008 and 2007 is calculated by dividing total dividends paid by America Movil, Telmex and Telmex Internacional (to no combined entities) by the total pro-forma weighted average of number of shares outstanding during each year.

 

   

Pro-forma dividend per share data in 2009 is calculated similar to 2008 and 2007, but also assumes that the TII Offer had occurred on January 1, 2009, thereby eliminating dividends previously paid to non-CGT shareholders during the 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.

 

 

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For the year ended December 31, 2009

 

          Telmex Internacional    Pro Forma Combined,
including the effects of
the TII Offer and the
CGT Offer
     AMX Historical    Historical    Equivalent
Basis
  
     (in Mexican pesos)

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,
including the effects of
the CGT Offer
     (in Mexican pesos)

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,
including the effects of
the CGT Offer
     (in Mexican pesos)

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

 

 

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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 América Móvil, assuming the completion of the TII Offer and the CGT Offer. We are presenting the unaudited pro forma condensed combined financial information, prepared in accordance with Mexican FRS and U.S. GAAP, to provide holders of TII Securities with a picture of what the results of operations and financial position of the combined businesses of América Móvil, Telmex Internacional and CGT might have looked like had these exchange offers been completed on an earlier date. See “Unaudited Pro Forma Condensed Combined Financial Statements” in this prospectus for an explanation of the basis of preparation of these data, including the assumptions underlying them and the limitations thereof.

 

     As of and for the year ended
December 31, 2009
     (Amounts in thousands of
Mexican pesos)

Balance Sheet Data

  

Mexican FRS

  

Total assets

   Ps. 820,614,060

Total shareholder’s equity

     302,729,500

Operating revenues

     578,474,099

Operating income

     149,898,813

Net income

     105,435,829

U.S. GAAP

  

Total equity

   Ps. 420,519,993

Net income

     98,112,870

 

 

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RISK FACTORS

In deciding whether to tender your TII Securities in this offer, you should read this prospectus carefully and the documents to which we refer you. You should also carefully consider the following risk factors related to this offer together with the risk factors set forth in the América Móvil 2009 Form 20-F and the Telmex Internacional 2009 Form 20-F.

Risks Related to This Offer

Market fluctuations may reduce the market value of the consideration we are offering to you because the share for share exchange ratio contemplated by the U.S. Offer is fixed

You are being offered the option to elect to receive consideration that consists of a specified number of AMX Securities, rather than a number of AMX Securities with a specified market value. As a result, if you elect to receive consideration in the form of AMX Securities, the market value of AMX Securities you receive in this offer will fluctuate depending upon the market value of our shares on the Mexican Stock Exchange and on the New York Stock Exchange. Accordingly, the market value of AMX Securities at the time at which they are received by you (which we estimate to be approximately six business days after our acceptance of tendered shares for purchase or exchange) may vary significantly from their market value on the date of this prospectus and at the time of the expiration of this offer.

The value of the AMX L Shares, including those represented by ADSs, and the cash consideration being offered will fluctuate due to movements in exchange rates

There will be no adjustment to the stock consideration offered for changes in the market price of either TII Securities, on the one hand, or AMX Securities, on the other, or for movements in exchange rates. Accordingly, the market value of the AMX Securities that holders of TII Securities will receive upon completion of the U.S. Offer and the exchange rate between the Mexican peso and the U.S. dollar at the time could vary significantly from the market value of AMX Securities and the Mexican peso to U.S. dollar exchange rate on the date of this document or on the date the TII Offer was first announced. The market value of the AMX Securities to be issued in the TII Offer and the Mexican peso to U.S. dollar exchange rate will also continue to fluctuate after completion of the offer.

In addition, the cash consideration that you may elect to receive for your TII Securities is determined in Mexican pesos. As a result, the value of this consideration in U.S. dollars will vary depending on the exchange rate between the Mexican peso and the U.S. dollar, which is expected to fluctuate between the date of this document and the date on which you will receive your cash consideration. Payment for TII ADSs will be made in U.S. dollars based on the Mexican peso to U.S. dollar exchange rate determined after the completion of the TII Offer. For historical exchange rate information, please see “Exchange Rates.” You should obtain current market quotations for TII Securities and AMX Securities.

If you do not tender in the TII Offer, you will continue to be a minority shareholder of Telmex Internacional and there may not be a liquid market for the TII Securities

Following the completion of the TII Offer, if you have not tendered your TII Securities, you will be a minority shareholder in Telmex Internacional with a limited (if any) ability to influence the outcome of any matters that are or can be subject to shareholder approval, including the appointment of directors, acquisition or disposition of substantial assets, the issuance of capital stock and other securities and the payment of dividends on TII Securities. Minority shareholders have limited rights under Mexican law and you will not be entitled to any appraisal or similar rights. Under Mexican law, we may be required to establish the TII Repurchase Trust or to make subsequent offers for the purpose of purchasing TII Securities that remain outstanding after the TII Offer. However, there can be no assurance that the circumstances that would give rise to the establishment of the

 

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TII Repurchase Trust or the making of any subsequent offer will arise or as to the timing of any TII Repurchase Trust or any such additional offer. There can also be no assurance that the consideration offered in any subsequent offer would be the same as in the TII Offer. See “The Offers—Purchases of TII Securities After Expiration of the TII Offer.” In addition, the market for TII Securities may become illiquid after the TII Offer. As a result, any future sale of the TII Securities could be at a price per share significantly less than the offer price in the TII Offer.

Furthermore, the TII L Shares and TII A Shares will continue to trade on the Mexican Stock Exchange unless (a) the CNBV authorizes the cancellation of the registration of the TII Shares in the National Securities Registry of the CNBV (“deregistration”) and (b) the Mexican Stock Exchange effects the delisting of the TII L Shares and the TII A Shares. The Mexican Securities Law provides that the CNBV shall authorize deregistration and delisting if the interests of minority shareholders and the market in general have been adequately protected. Under Mexican law, among other conditions, we would be required to obtain approval of the holders of at least 95% of the outstanding TII Shares (with all series voting as a single class), including any TII Shares we acquire in the TII Offer or otherwise, voting at a shareholders’ meeting to approve resolutions permitting deregistration and delisting.

The circumstances that would lead to the establishment of the TII Repurchase Trust, or to our making an additional offer for TII Securities, may not arise or may occur only after significant delays. There can accordingly be no assurance that there will be a TII Repurchase Trust or that we will make an additional offer or as to the timing of any TII Repurchase Trust or any such additional offer.

If Telmex Internacional obtains deregistration and delisting in Mexico, we also intend to cause Telmex Internacional to take the steps necessary to delist the TII ADSs from the NYSE, terminate the deposit agreements for the TII ADSs, and terminate the registration of the TII L Shares and the TII A Shares under the Exchange Act.

Even if Telmex Internacional does not obtain deregistration and delisting in Mexico, we may decide to cause Telmex Internacional to delist from the NYSE, terminate the deposit agreements and deregister under the Exchange Act. We may make this decision separately for the TII L Shares and ADSs and for the TII A Shares and ADSs. The decision would depend on the results of the TII Offer and any additional subsequent purchases, and on our management’s evaluation of the public float, trading volumes and liquidity of the TII ADSs after completion of the TII Offer.

The liquidity of any TII Security outstanding after the consummation of the TII Offer would be materially and adversely affected upon deregistration and delisting as you would likely no longer have an active trading market in which to sell such securities. As a result, any sale of your TII Securities could be at a price per share significantly less than the consideration in the TII Offer.

Failure to acquire a substantial majority of the outstanding capital stock of Telmex Internacional would affect our ability to complete any post-closing changes in the corporate structure of the combined company, which could reduce or delay the cost savings or revenue benefits to the combined company

Consummation of the TII Offer is not conditioned on participation by a minimum number of shares of Telmex Internacional. In addition, pursuant to Mexican law, we will not be in a position to cause the delisting of such shares from the Mexican Stock Exchange and deregistration of such shares from the CNBV unless, among other things, we obtain at least 95% of the issued and outstanding shares of Telmex Internacional (the level of shareholder approval required for delisting and deregistration under Mexican law). If we acquire less than 100% of the outstanding shares of Telmex Internacional, the existence of minority shareholders at Telmex Internacional, and the continuing listing and registration of Telmex Internacional may generate additional expenses and result in administrative inefficiencies. We may also be required to maintain separate audit committees at the boards of directors of América Móvil and Telmex Internacional, and we may be subject to

 

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separate reporting requirements with the Mexican Stock Exchange. In addition, all transactions between Telmex Internacional and us could be subject to additional requirements under Mexican law, which may limit our ability to achieve certain savings and to conduct the joint operations as a single business unit in order to achieve our strategic objectives, such as effecting certain changes in the corporate structure of Telmex Internacional and its subsidiaries that could result in significant benefits to the combined company. As a result, it may take longer and be more difficult to effect any post-closing changes in corporate 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 our ability to achieve the expected amount of cost synergies and revenue benefits after the offer to acquire outstanding shares of Telmex Internacional is completed.

If you do not tender in the TII Offer, you may not receive any future dividends from Telmex Internacional

Telmex Internacional paid dividends of per share amounts for calendar years 2007, 2008 and 2009, respectively. Following the completion of the TII Offer, Telmex Internacional may, or we may cause Telmex Internacional to, reduce the amount of any dividends paid or to discontinue the payment of dividends, in order to invest in its business or to pay other obligations, including financing that we may provide to Telmex Internacional or its subsidiaries from time to time. As a result, you should not assume that Telmex Internacional will continue paying dividends in respect of your TII Securities in the event you do not participate in the TII Offer.

We 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 and our results of operations, financial condition and the price of our shares may suffer

Our acquisition of Telmex Internacional may not achieve the business growth opportunities, revenue benefits, cost savings and other benefits we anticipate. We believe the offer consideration is justified by these benefits we expect to achieve by combining our operations with those of Telmex Internacional. However, these benefits may not develop and other assumptions upon which the offer consideration was determined may prove to be incorrect, as, among other things, such assumptions were based on publicly available information.

We may be unable to fully implement our business plans and strategies for the combined businesses due to regulatory limitations. Each of América Móvil and Telmex Internacional is subject to extensive government regulation, and we may face regulatory restrictions in our provision of combined services in some of the countries in which we operate. For example, in Brazil, América Móvil’s and Telmex Internacional’s businesses are regulated by the Brazilian National Telecommunications Agency, or “Anatel”. Pending regulations by Anatel, which focus on economic groups with significant market powers, will impose new cost-based methodologies for determining interconnection fees charged by operators in Brazil. We cannot predict whether Anatel would impose specific regulations that would affect our combined operations more adversely than they would affect our individual operations. In Mexico, América Móvil is part of an industry-wide investigation by the Federal Economic Competition Commission (Comisión Federal de Competencia Económica, or “Cofeco”) to determine whether any operators possess substantial market power or engage in certain monopolistic practices in certain segments of the Mexican telecommunications market. CGT is the direct holder of approximately 59.4% of the outstanding capital stock of Telmex, and we will be acquiring a controlling interest in Telmex through the offer to acquire outstanding shares of CGT. As a result of those investigations, Telmex and América Móvil have already been found to have substantial power in certain markets. We cannot predict whether Cofeco 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 us to result from the TII Offer and the CGT Offer may not be achieved as expected, or at all, or may be delayed. To the extent that we incur higher integration costs or achieve lower revenue benefits or fewer cost savings than expected, our results of operations and financial condition may suffer.

 

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If you elect to receive AMX Securities in the TII Offer, you will receive securities with limited voting rights

Holders of TII Securities may elect to receive AMX L Shares, AMX L ADSs or cash in the TII Offer. Pursuant to América Móvil’s bylaws, holders of AMX L Shares are entitled to vote as a separate class to elect two members of the board of directors and on any action that would prejudice the rights of holders of AMX L Shares, and to vote as a combined class with all shares on the following matters: a transformation of América Móvil to another type of company; any merger of América Móvil; any extension of América Móvil’s corporate life; any voluntary dissolution of América Móvil; any change in América Móvil’s corporate purpose; any transaction that represents 20% or more of América Móvil’s consolidated assets; any change in the jurisdiction of incorporation of América Móvil; and any removal of América Móvil shares from listing on the Mexican Stock Exchange or any foreign stock exchange. Holders of AMX AA Shares and AMX A Shares are entitled to vote as a combined class for a majority of the company’s directors and on all matters presented to shareholders. See “Comparison of the Rights of Shareholders of América Móvil and Telmex Internacional.”

 

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BACKGROUND TO THE TII OFFER AND THE CGT OFFER

During November 2009, Daniel Hajj, the chief executive officer of América Móvil, and Oscar Von Hauske, the chief executive officer of Telmex Internacional, began to discuss potential commercial arrangements to offer bundled telecommunication services to their respective clients in Brazil. The objective was to be able to match the existing offerings of competing operators that provide integrated fixed and mobile services. Subsequent discussions between Mr. Hajj and Mr. Von Hauske expanded to cover other potential commercial synergies or opportunities not only in Brazil, but also in other countries where both entities operate.

These preliminary discussions led to a number of meetings in late December 2009. These meetings were part of the continued exploration of commercial opportunities to maximize the use of third generation technology deployed by América Móvil in the region and the convergence of services through advances in the technologies deployed by both America Móvil and Telmex Internacional. The meetings addressed a more comprehensive approach to the integration of services, which might entail the merger or structural integration of some of the operating companies in the region, including Brazil and Colombia.

At the beginning of January 2010, Daniel Hajj began discussing with members of the Slim Family and directors of CGT the possibility of a combination of América Móvil with CGT and Telmex Internacional, rather than specific, more limited mergers or integrations of some of the operating companies of América Móvil and Telmex Internacional. These discussions led to a conclusion that such a combination would offer the shareholders of the two companies not only service integration, but also significant long-term synergies among the business lines, licenses, infrastructure and administration of América Móvil and Telmex Internacional in various countries throughout Latin America. They also developed a proposal that the consideration América Móvil could offer in any transaction could consist of shares of América Móvil, in a ratio based on the relative market prices of the AMX L Shares and TII L Shares, in view of the liquidity of both shares in the market. In the case of CGT, they discussed the possibility of relying on the market prices for AMX L Shares, TII L Shares and the TMX L Shares adjusted for net debt of CGT.

Following such discussions, also in early January, Mr. Hajj and Mr. Von Hauske, together with certain members of the Slim Family and certain directors of CGT, concluded that the proposed combination should be analyzed from a corporate and regulatory perspective in order to submit a formal proposal to América Móvil’s board of directors for its consideration and action in accordance with Mexican legal requirements. This conclusion was based, among other factors, on (i) the evolution of the telecommunications market towards converging technological platforms for voice, data and video services, (ii) recent developments in applications, functionality and equipment, (iii) the resulting strong prospects for growth in the demand for services in Latin America, (iv) the advantages of offering integrated communication services in the region, independently of the platform on which such services are originated, and (v) the opportunity for other long-term synergies.

During the weekend of January 9 and 10, 2010, Mr. Hajj contacted senior executives of América Móvil, members of the Slim Family and outside legal counsel to discuss the feasibility and structure of a combination. Also during the same weekend, representatives of AT&T, which is a significant shareholder of both Telmex Internacional and América Móvil, were informed of América Móvil’s consideration of the possible transaction. América Móvil’s general counsel and secretary of the board Alejandro Cantú met with outside counsel to consider a preliminary structure for the combination. On Monday, January 11, a working group of executives and advisors reported to Mr. Hajj that the preferable structure for effecting a combination would be concurrent exchange offers to shareholders of CGT and Telmex Internacional, because a statutory merger and other potential alternatives to achieve the combination under Mexican law could have adverse tax consequences and entail more extensive regulatory processes in México and Latin America.

During the course of the following week, América Móvil’s chief financial officer Carlos García Moreno and Mr. Cantú had several conference calls and meetings with outside legal and tax advisors for América Móvil and with representatives of Grupo Financiero Inbursa as financial advisor to América Móvil. They also met and had several discussions regarding the potential combination with representatives of AT&T.

 

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On January 13, 2010, the board of directors of América Móvil met, with three members participating by conference call (Carlos Bremer, Rayford Wilkins and Mike Viola). Also attending the meeting were Mr. García Moreno, Mr. Cantú, outside counsel and representatives of Grupo Financiero Inbursa as financial advisor to América Móvil. Mr. Hajj presented the proposed combination to the board, and the board authorized the Company’s officers to pursue the transaction on the terms proposed. The board’s authorization was unanimous except that Mr. Hajj and Mr. Patrick Slim Domit did not participate in the vote due to potential conflicts of interest, although each joined in the decision of the other directors.

Immediately after the meeting, América Móvil issued a press release announcing its intention to make the CGT Offer and the TII Offer. That same day, América Móvil also delivered a letter to the boards of directors of each of CGT and Telmex Internacional requesting their authorization for América Móvil’s commencement of the CGT Offer and the TII Offer, as required by Article Twelve of CGT’s bylaws and Article Twelve of Telmex Internacional’s bylaws. The letters also provided the additional information required by each company’s bylaws to be provided by any person interested in making an offer or acquiring 10% or more of the issued and outstanding shares of each respective company.

On February 9, 2010, the Audit and Corporate Practices Committee of América Móvil met and ruled favorably with regards to the initiation by América Móvil of the processes concerning the possible execution of the TII Offer and the CGT Offer. On March 9, 2010, the board of directors of América Móvil held a meeting to discuss the implementation of the TII Offer and the CGT Offer. At this meeting, Credit Suisse Securities (USA) LLC (“Credit Suisse”) rendered to the board of directors of América Móvil an opinion as to the fairness, from a financial point of view and as of the date of such opinion, to América Móvil of the consideration proposed to be paid by América Móvil in the TII Offer and the CGT Offer.

On March 17, 2010, a general ordinary América Móvil shareholders’ meeting was held in Mexico City, Mexico. At this meeting, the shareholders of América Móvil authorized the acquisition by América Móvil of up to all the outstanding shares of CGT and of up to all the outstanding shares of Telmex Internacional not directly or indirectly owned by CGT.

On March 19, 2010, the board of directors of Telmex Internacional resolved to inform Telmex Internacional shareholders that it believed the consideration offered in the TII Offer was fair, from a financial point of view, to shareholders of Telmex Internacional. See “Opinion of the Board Directors of Telmex Internacional.”

 

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PURPOSE OF AND OUR PLANS AFTER THE TII OFFER AND THE CGT OFFER

Operational integration and synergies with Telmex Internacional

The purpose of the TII Offer and the CGT Offer is to acquire, directly or indirectly, substantially all the issued and outstanding shares of Telmex Internacional in order to combine our wireless communications services with Telmex Internacional’s voice, data and video transmission, Internet access and other telecommunications services in Brazil, Colombia and the Latin American countries other than Mexico where both companies conduct operations. We believe that the telecommunications industry has evolved in recent years, resulting in integrated technological platforms that provide combined voice, data and video services. Also, recent developments in software applications, functionality and equipment are paving the way for a significant increase in demand for data services throughout Latin America. We believe that we would be in a position to offer integrated telecommunications services to our customers in those countries in Latin America in which both we and Telmex Internacional operate, regardless of the technological platform that generates the demand at any given time.

There are seven countries in which both we and Telmex Internacional have significant businesses. In each of these countries, we provide wireless voice and data telecommunications services. The following table indicates the services offered in each of the countries.

 

Country

  

Services Provided by Telmex Internacional

Brazil   

Local, Domestic and International Long Distance

Internet Access

Pay Television (DTH)

Data Solutions (VPN)

Managed Voice, Data and Video

Data Center

Call Center

Satellite

Chile   

Local, Domestic and International Long Distance

Internet Access

Pay Television (DTH-HFC)

Data Solutions (VPN)

Managed Voice, Data and Video

Data Center

Satellite

Argentina   

Local, Domestic and International Long Distance

Internet Access

Data Solutions (VPN)

Managed Voice, Data and Video

Data Center

Yellow Pages Directory in Print and On the Internet

Colombia   

Local, Domestic and International Long Distance

Internet Access

Pay Television (HFC)

Data Solutions (VPN)

Managed Voice, Data and Video

Data Center

Yellow Pages Directory in Print and On the Internet

 

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Country

  

Services Provided by Telmex Internacional

Peru   

Local, Domestic and International Long Distance

Public Telephony

Internet Access

Pay Television (DTH-HFC)

Data Solutions (VPN)

Managed Voice, Data and Video

Data Center

Satellite

Yellow Pages Directory in Print and On the Internet

Ecuador   

Local, Domestic and International Long Distance

Public Telephony

Internet Access

Data Solutions (VPN)

Data Center

Pay Television (HFC)

Uruguay   

International Long Distance

Internet Access

Data Solutions (VPN)

International Managed Voice, Data and Video

Data Center

 

* Through its subsidiaries, Telmex Internacional provides double and triple play offerings in Brazil, Chile, Colombia, Perú and Ecuador. In Argentina Telmex Internacional provides double play offerings.

We expect to be able, following the completion of the CGT Offer and the TII Offer, to generate important synergies and growth opportunities throughout Latin America and particularly in these seven countries. The combination will permit a more efficient use of the networks, information systems, management and personnel of the operating companies, and will enable us to offer more integrated and universal services to our customers. We also expect the combined businesses will be in a stronger position in negotiations with major suppliers and will be better able to implement new technologies.

We have identified a number of areas where we can develop specific plans for integration and synergies: (1) operations, networking and IT, (2) legal, finance and tax, (3) commercial and (4) organization. Once the offers have been completed, we expect to work closely with Telmex Internacional in order to achieve results in each of the four major areas we have identified. We have not developed estimates of the specific financial effects of any of these measures.

We do not expect to engage in any material disposition, liquidation or reorganization of assets of businesses of Telmex Internacional. We are currently not contemplating any significant dispositions, and we do not expect to be required to do so by relevant regulatory or competition authorities in connection with the offers. Depending on the integration structure we decide to implement in each country, we may require regulatory or competition approvals or consents. We will continue, as in the past, to review possible acquisitions that could be accretive to the group’s portfolio of businesses, which depending on the circumstances could be made either by us or by Telmex Internacional, or by any of our respective subsidiaries.

We also provide services in many countries where Telmex Internacional currently has no material operations, including wireless telecommunications services in Paraguay and Uruguay, fixed-line and wireless telecommunications services in Guatemala, El Salvador, Honduras, Nicaragua and Panama, wireless, fixed-line and broadband telecommunications services in the Dominican Republic and Puerto Rico and wireless telecommunications and value added services in Jamaica.

 

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Our plans for Telmex Internacional

Upon completion of the TII Offer and the CGT Offer, if we directly hold a substantial majority of the outstanding TII Securities (other than those held by CGT), we will have a controlling interest in Telmex Internacional. Our immediate priority will be to ensure that the two companies continue to provide high quality service to their customers and to work efficiently towards achieving the generation of synergies and growth opportunities throughout Latin America.

Depending on the results of the TII Offer and CGT Offer and the development of our business plan with respect to the combined entities, we may decide to make changes in the corporate structure of Telmex Internacional’s group of subsidiaries. For example, while we do not currently have any specific plans to do so, we may decide to cause Telmex Internacional to reorganize or merge some of its subsidiaries in certain markets.

We will, however, consider changes in the capital structure and financing practices of Telmex Internacional and its subsidiaries. In particular, we may provide, directly or through our subsidiaries, financing to Telmex Internacional or any of its subsidiaries at any time before, during or after the TII Offer and the CGT Offer.

Following the consummation of the TII Offer and the CGT Offer, we also expect to review Telmex Internacional’s past practices in respect of dividend distributions and share repurchases, as well as its capital structure and leverage. We have not currently developed any specific plans in this regard, and we believe Telmex Internacional can continue operating successfully as an independently capitalized and funded group of companies.

We do not expect any material changes in Telmex Internacional’s management following the completion of the TII Offer and the CGT Offer. However, if the TII Shares are delisted and deregistered in Mexico and in the United States, we would expect to make changes to its board composition, including removing all publicly elected members of the board of directors of Telmex Internacional.

Because consummation of the TII Offer is not conditioned on the tender of a minimum number of TII Securities, we could complete the TII Offer but hold less than 100% of the TII Shares. The existence of minority shareholders at Telmex Internacional may generate additional expenses and result in administrative inefficiencies. For example, we may be precluded from delisting TII Securities. We may also be precluded from making changes in the corporate structure of Telmex Internacional and its subsidiaries that would result in significant benefits to the combined entity.

Our plans for CGT

Depending on the results of the CGT Offer, we may decide to make changes in the corporate structure of CGT and its subsidiaries. For example, while we do not currently have any specific plans to do so, we may decide to reorganize or merge CGT or any of its subsidiaries with other entities within our corporate structure.

We may consider changes in the financing practices of CGT. We may also provide, directly or through our subsidiaries, financing to CGT or any of its subsidiaries at any time before, during or after the TII Offer and the CGT Offer.

Following the consummation of the CGT Offer, we also expect to review CGT’s continuing listings in the different stock exchanges where it is currently listed, its past practices in respect of dividend distributions and share repurchases, and its capital structure and leverage.

Delisting of TII Securities

See “The Offers—Purchases of TII Securities After Expiration of the TII Offer” for a discussing regarding the potential delisting of the TII Securities after the TII Offer.

 

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Our Plans for Telmex

Although we expect to acquire, through CGT, a controlling interest in Telmex, we are not planning currently to pursue any integration with the operations of Telmex. However, we may analyze possible synergies. We may also provide, directly or through our subsidiaries, financing to Telmex or any of its subsidiaries at any time before, during or after the TII Offer and the CGT Offer.

 

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OPINION OF THE BOARD OF DIRECTORS OF TELMEX INTERNACIONAL

In connection with the announcement of the TII Offer, on January 13, 2010, América Móvil delivered a letter to the board of directors of Telmex Internacional requesting their authorization for América Móvil’s commencement of the TII Offer, as required by Telmex Internacional’s bylaws in the event that a shareholder intends to make an acquisition of shares that would result in a change of control of Telmex Internacional. The letters also provided the additional information required by each company’s bylaws to be provided by any person interested in making an offer or acquiring 10% or more of the issued and outstanding shares of the company.

On January 14, 2010, the members of the board of directors of Telmex Internacional unanimously by written resolution voted to authorize América Móvil to commence proceedings to launch the offer for TII Securities, under the provisions of Telmex Internacional’s by-laws. The board reserved its right to make a recommendation to Telmex Internacional shareholders regarding the TII Offer. The board also unanimously authorized the officers to engage a financial advisor to provide an opinion on the fairness of the transaction to the audit committee of Telmex Internacional. Messrs. Carlos Slim Domit and Arturo Elias Ayub did not participate in the vote due to potential conflicts of interest but each joined in the decision of the other directors.

On March 19, 2010, the board of directors of Telmex Internacional resolved to inform Telmex Internacional shareholders that it believed the consideration offered in the TII Offer was fair, from a financial point of view, for shareholders of Telmex Internacional. In making this determination, the board of directors of Telmex Internacional took into consideration the oral opinion rendered at such meeting by Merrill Lynch to the board of directors of Telmex Internacional, and subsequently confirmed in writing, that as of that date and based upon and subject to the factors and assumptions set forth in the opinion, the consideration to be received in the TII Offer by holders of the TII Securities (other than CGT and its affiliates) was fair, from a financial point of view, to such holders. Messrs. Carlos Slim Domit and Arturo Elias Ayub did not participate in the vote due to the fact that potential conflicts of interest could be perceived but each joined in the decision of the other directors. The members of the board of directors of Telmex Internacional who are also shareholders of Telmex Internacional announced their decision to participate in the TII Offer under the terms announced by América Móvil and assuming that the economic and market conditions remain stable. The board of directors of Telmex Internacional has not made a recommendation to holders of TII Securities as to whether or not holders of TII Securities should participate in the TII Offer. Within ten business days of the commencement of the TII Offer, Telmex Internacional will issue a statement under Schedule 14D-9 with respect to the TII Offer.

 

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THE OFFERS

The CGT Offer and the TII Offer

We are conducting two separate exchange offers primarily to facilitate our ownership, directly or indirectly, of all the issued and outstanding shares of Telmex Internacional. The two separate offers are as follows:

 

   

The CGT Offer. The consideration in the CGT Offer will consist of 2.0474 AMX L Shares for each share of CGT. This prospectus relates only to the TII Offer and not the CGT Offer. The CGT Offer is not subject to registration in the United States or U.S. legal requirements generally applicable to tender offers. The conditions to the CGT Offer are substantially similar to the conditions to the TII Offer, except that the CGT Offer is not conditioned on the consummation of the TII Offer.

 

   

The TII Offer. The consideration in the TII Offer will consist of 0.373 shares of AMX L Shares or Ps. 11.66, at the election of the exchanging holder, for each share of Telmex Internacional.

The TII Offer: U.S. Offer—Mexican Offer

As part of the TII Offer, we are offering Telmex Internacional shareholders an election. For each TII A Share or TII L Share, the holder may elect to receive either 0.373 AMX L Shares or Ps. 11.66 in cash. The TII Offer is being made through two offers:

 

   

the U.S. Offer (made pursuant to this prospectus to all holders of TII L Shares and holders of TII A Shares resident in the United States, including holders who are U.S. holders (within the meaning of Rule 14d-1(d) under the Exchange Act) and to all holders of TII ADSs, irrespective of residency); and

 

   

the Mexican Offer (made pursuant to the Mexican offer document to all holders of TII L Shares and holders of TII A Shares),

in each case, if, pursuant to the local laws and regulations applicable to such holders, they are permitted to participate in the relevant offer.

The U.S. Offer and the Mexican Offer are being conducted simultaneously and, in all material respects, have the same terms and are subject to the same conditions, except that all cash payments in the U.S. Offer will be in U.S. dollars, whereas all cash payments in the Mexican Offer will be made in Mexican pesos.

If you elect to participate in the Mexican Offer, you will not be afforded the rights and protections that are provided under the U.S. federal securities laws as they relate to tender offers, other than the anti-fraud provisions of the U.S. federal securities laws.

The U.S. Offer and the Mexican Offer are being made for all of the issued and outstanding TII L Shares and TII A Shares and TII ADSs. As of February 28, 2010, there were 9,503 million TII L Shares and 394 million TII A Shares outstanding. As of that same date, CGT owned 50.9% of the outstanding TII L Shares and 23.3% of the TII A Shares (in the aggregate, 60.7% of all outstanding shares of Telmex Internacional). CGT has announced that it will not tender any of its TII L Shares and TII A Shares in the TII Offer. We expect to acquire indirect ownership of the TII Securities owned by CGT through the CGT Offer.

AT&T, Inc. has stated, in a beneficial ownership report filed with the SEC on April 30, 2010, that it intends to tender all of its TII Securities in the TII Offer in exchange for AMX L Shares. AT&T also indicated that, upon settlement of the TII Offer, it may make market purchases of a number of additional shares and/or ADSs of América Móvil with a market value of up to an aggregate of U.S.$600 million in order to maintain the percentage ownership of América Móvil that AT&T held prior to the completion of the TII Offer and that it may fund such purchases with the proceeds of market sales of shares of Telmex.

The U.S. Offer and the Mexican Offer will commence on May 11, 2010. The U.S. Offer and the Mexican Offer will expire at 5:00 p.m., New York City time (4:00 p.m. Mexico City time) on June 10, 2010, unless extended.

 

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The U.S. Offer is open to all holders of TII L Shares and TII A Shares who are resident in the United States and to all holders of TII ADSs irrespective of residency. Copies of the offer documentation being used in the Mexican Offer and any related materials are not being, and should not be, mailed or otherwise distributed or sent in or into the United States.

The distribution of this document and the making of this U.S. Offer may, in some jurisdictions, be restricted by law. The U.S. Offer is not being made, directly or indirectly, in or into, and may not be accepted from within, any jurisdiction in which the making of the U.S. Offer or the acceptance thereof would not be in compliance with the laws of that jurisdiction. Persons who come into possession of this document are urged to inform themselves of and observe any and all of these restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of that jurisdiction. We assume no responsibility for any violation by any person of any of these laws or restrictions.

The following are the International Securities Identification Numbers (“ISINs”) and CUSIP numbers for the TII Securities:

 

TII Security

  

ISIN

  

CUSIP

TII L Share

   MX01TE090014    Not applicable

TII A Share

   MX01TE090006    Not applicable

TII L ADS

   US8796901051    879690105

TII A ADS

   US8796902042    879690204

Relief Granted by the U.S. Securities and Exchange Commission

We have been granted by the SEC certain exemptions from its otherwise applicable rules and no-action relief to allow this offer to proceed in the manner described in this prospectus. In particular, we have been granted the following:

 

   

exemptive relief from the provisions of Rule 14d-10(a)(1) under the Exchange Act to permit the dual offer structure of the U.S. Offer and the Mexican Offer in the manner described in this prospectus; and

 

   

exemptive relief from the provisions of Rule 14e-5 under the Exchange Act to permit the exchange or purchase of TII Securities in the Mexican Offer during the pendency of the U.S. Offer.

Terms of the U.S. Offer

We are offering, upon the terms and subject to the conditions of the U.S. Offer, to exchange:

 

   

for each TII L Share or TII A Share that you validly tender and do not properly withdraw prior to the expiration date of this offer:

 

   

Ps. 11.66 in cash, to be paid in U.S. dollars (estimated at U.S.$0.90, based on the exchange rate on May 21, 2010); or

 

   

0.373 AMX L Shares;

 

   

for each TII ADS that you validly tender and do not properly withdraw prior to the expiration date of the U.S. Offer:

 

   

Ps. 233.20 in cash, to be paid in U.S. dollars (estimated at U.S.$17.98, based on the exchange rate on May 21, 2010); or

 

   

0.373 AMX L ADSs.

Participating holders of TII ADSs may elect to receive AMX L ADSs, cash or a combination of AMX L ADSs and cash. Participating holders of TII A Shares or TII L Shares may elect to receive AMX L Shares, cash or a combination of AMX L Shares and cash.

 

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The cash consideration to be paid in the U.S. Offer to tendering holders of TII Securities will first be paid by América Móvil to Banco Inbursa, as custodian, in Mexican pesos after the expiration of the U.S. Offer. The custodian will then arrange for the conversion of the consideration into U.S. dollars, net of fees and expenses, using the U.S. dollar / Mexican peso spot market at a rate on the day it receives the cash consideration in Mexican pesos by Banco Inbursa, as custodian. The custodian will transfer the U.S. dollars to the exchange agent. The exchange agent will then pay the net proceeds of that conversion to the former holders of TII L Shares, TII A Shares and TII ADSs validly tendered for cash. See “Risk Factors—The value of the AMX L Shares, including those represented by ADSs, and the cash consideration being offered will fluctuate due to movements in exchange rates.” Under no circumstances will interest be paid on the cash to be received.

As at January 12, 2010, the last trading day prior to our announcement on January 13, 2010, the total value of the consideration being offered by América Móvil pursuant to the TII Offer was:

 

   

assuming all holders of TII Securities other than CGT elect to exchange for AMX Securities, 2,638 million AMX Securities, based on the exchange ratio of 0.373 AMX Security for each TII Security; and

 

   

assuming all holders of TII Securities other than CGT elect to tender their shares for cash, approximately Ps. 82,495 million (U.S.$6,360 million, based on the exchange rate on May 21, 2010).

The terms of the TII Offer are based on the closing prices of the AMX L Shares and the TII L Shares on the Mexican Stock Exchange over the ten trading days through January 12, 2010, the day before we announced our intention to make the TII Offer and the CGT Offer. The number of AMX Securities offered for each TII Security is equal to the average closing price of one TII L Share over that period divided by the average closing price of one AMX L Share over the same period. The cash consideration per share is equal to the cash value of the share consideration, using the average closing price of one TII L Share over the same period. On January 12, 2010, the average closing price of one TII L Share over the previous ten trading day period was Ps. 11.66 and the average closing price of one AMX L Share over the same period was Ps. 31.25800. All participating holders of TII Securities will receive the same consideration as part of the TII Offer. The offer consideration determined as described above does not include any premium for the exchange or purchase of TII Securities.

Fractional Entitlements

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

The exchange agent will aggregate the fractional AMX L Shares and AMX L ADSs, execute a sale and deliver the net proceeds in U.S. dollars on a pro rata basis.

Under no circumstances will interest be paid on the cash to be received in lieu of any fraction of an AMX Share or AMX ADS, regardless of any delay in making the payment. There shall also be no interest payable on the cash consideration for the TII Securities.

The CGT Offer

Concurrently with the TII Offer, we are also making the CGT Offer to purchase all of the outstanding shares of CGT. The consideration in the CGT Offer consists of 2.0474 AMX L Shares for each share of CGT. The CGT Offer is not subject to registration under the Securities Act or to the requirements applicable to tender offers under Regulation 14D and Rules 14e-1 and 14e-2 under the Exchange Act. The consummation of the TII Offer is conditioned on the consummation of the CGT Offer. Except for such condition, the conditions to the CGT Offer are substantially similar to the conditions in the TII Offer.

CGT is a holding company the principal assets of which consist of shares of Telmex Internacional and shares of Telmex. Based on beneficial ownership reports filed with the SEC, CGT holds, directly or indirectly,

 

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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, CGT owned 50.9% of the outstanding TII L Shares, 23.3% of the TII A Shares and 73.9% of Telmex Internacional’s outstanding TII AA Shares (in the aggregate, 60.7% of all outstanding shares of Telmex Internacional). These figures take into account certain forward share purchase transactions between CGT and certain financial institutions pursuant to which CGT is obligated to purchase and the financial institutions are obligated to sell TII L Shares or TMX L Shares at fixed prices. Without taking into account the TII L Shares subject to the forward share purchase transactions, CGT owned 32.0% of the outstanding Series L shares of Telmex (in the aggregate, 50.5% of all outstanding shares of Telmex) and 33.3% of the outstanding TII L Shares (in the aggregate, 51.4% of all outstanding shares of Telmex Internacional). As of December 31, 2009, CGT’s indebtedness was Ps. 29,479 million (U.S.$2,257 million at the December 31, 2009 exchange rate), excluding the indebtedness of its consolidated subsidiaries Telmex and Telmex Internacional.

Our Structure after Completion of the TII Offer and the CGT Offer

Below is a diagram showing our organizational structure immediately after the consummation of the TII Offer and the CGT Offer, assuming all of the issued and outstanding TII Securities (other than those held by CGT) and CGT shares are purchased or exchanged pursuant to the terms of the TII Offer and the CGT Offer.

LOGO

Percentages shown above indicate the ownership percentage, taking together all outstanding shares of all series with respect to each company.

 

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The following table shows the effect that the TII Offer and the CGT Offers will have on América Móvil’s capital structure. The first two columns reflect the capital structure of América Móvil prior to the consummation of the TII Offer and the CGT Offer. The third and fourth columns give effect to the TII Offer and the CGT Offer and assume that all outstanding TII Securities (other than those held by CGT) have been tendered to América Móvil with a share election (maximum dilution). The fourth and fifth columns also give effect to the CGT Offer and the TII Offer but assume that all the outstanding TII Securities (other than those held by CGT) have been tendered with a cash election (minimum dilution). We cannot predict how many shareholders of Telmex Internacional or CGT will participate in the offers or whether the participating shareholders of Telmex Internacional will elect AMX Securities or cash.

América Móvil Capital Structure

(As of February 28, 2010)

 

     Prior to the TII Offer and the
CGT Offer
   Upon Consummation of the TII
Offer and the CGT Offer(1)
   Upon Consummation of the TII
Offer and the CGT Offer(2)

Series

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

Series A

   448,667,716    1.39    448,667,716    1.07    448,667,716    1.14

Series AA

   11,712,316,330    36.38    11,712,316,330    27.91    11,712,316,330    29.78

Series L

   20,032,546,410    62.23    29,800,621,812    71.02    27,162,112,480    69.07
                             

Total

   32,193,530,456    100.00    41,961,605,858    100.00    39,323,096,526    100.00

 

(1) Assumes that all outstanding TII Securities (other than those held by CGT) have been tendered to América Móvil with a share election (maximum dilution).
(2) Assumes that all the outstanding TII Securities (other than those held by CGT) have been tendered with a cash election (minimum dilution).

Conditions to the U.S. Offer

We will not be required to accept any TII Securities for purchase or exchange, or pay for or exchange any TII Securities, that have been tendered pursuant to this offer if any of the following events or circumstances have occurred and are continuing (and have not (to the extent legally permissible) been expressly waived by us):

 

   

any public, governmental, judicial, legislative or regulatory authority shall have enacted, issued, promulgated, enforced or entered, or shall have threatened to enact, issue, promulgate, enforce or enter, any statute, law, rule, regulation, executive order, decree, injunction or other order which (a) prevents or prohibits the consummation of the TII Offer, (b) adversely affects the terms and/or conditions of the TII Offer, (c) imposes material limitations on our ability (or any of our affiliates) effectively to acquire or to hold or to exercise full rights of ownership of TII Shares or TII ADS purchased or exchanged pursuant to the TII Offer including, without limitation, the right to vote the TII Shares or TII ADS, (d) prohibits, restrains or makes or seeks to make illegal the payment for, purchase of or exchange of the TII Shares or TII ADSs pursuant to the TII Offer or that would impose material damages in connection therewith, (e) restrains or limits Telmex Internacional’s business operations, (f) imposes or seeks to impose any material condition to the TII Offer in addition to the conditions set forth elsewhere in the TII Offer, nor shall any action, proceeding or complaint be commenced that seeks to do any of the foregoing or (g) imposes any limitation on the participation of any shareholder in the TII Offer;

 

   

any waiver, consent, extension, approval, action or nonaction from any governmental, public, judicial, legislative or regulatory authority or agency or other party which is necessary to consummate, or for any shareholder to participate in, the TII Offer and the other transactions contemplated by us 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 TII Offer, in either case unacceptable to us, in our reasonable judgment;

 

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any change (or any condition, event or development involving a prospective change) shall have occurred or been threatened in the business, properties, assets, liabilities, capitalization, shareholders’ equity, condition (financial or otherwise), operations, licenses, franchises, permits, permit applications, results of operations, cash flows or prospects of Telmex Internacional or any of its subsidiaries which, in our reasonable judgment, is or may be materially adverse to Telmex Internacional or any of its subsidiaries, or we shall have become aware of any fact which, in our reasonable judgment, has or may have material adverse significance with respect to either the value of Telmex Internacional or any of its subsidiaries or the value of the TII Securities;

 

   

there shall have occurred or been threatened (1) any general suspension of trading in, or limitation on prices for, securities on any national securities exchange or in the over-the-counter market, any decline in either the Dow Jones Industrial Average or the Standard & Poors Index of 500 Industrial Companies by an amount in excess of 10% measured from the close of business on the last trading day before the commencement of the U.S. Offer, or any material adverse change in prices generally of shares on the NYSE, (2) any general suspension of trading in, or limitation on prices for, securities on any national securities exchange or in the over-the-counter market, any decline in either the IPC (Índice de Precios y Cotizaciones) or the INMEX (Índice México) by an amount in excess of 10% measured from the close of business on the last trading day before the date of the U.S. Offer, or any material adverse change in prices generally of shares on the Mexican Stock Exchange, (3) a declaration of a banking moratorium or any suspension of payments in respect of banks by federal or state authorities in the U.S. or Mexico (whether or not mandatory), (4) any limitation (whether or not mandatory) by any governmental authority or agency on, or other event which, in the reasonable judgment of América Móvil, might affect the extension of credit by banks or other lending institutions, (5) a commencement or escalation of a war, armed hostilities or terrorist event or other national or international crisis directly or indirectly involving the U.S. or Mexico, (6) any significant change in U.S., Mexican or any other currency exchange rates or any suspension of, or limitation on, the markets therefore (whether or not mandatory), or (7) in the case of any of the foregoing existing at the time of the commencement of the U.S. Offer, a material acceleration or worsening thereof;

 

   

the conditions precedent to the Mexican Offer have not been satisfied or waived; or

 

   

we have not acquired through the CGT Offer at least 51% of the outstanding shares of CGT, provided, however, that we will exercise this condition only if it is not satisfied due to regulatory impediments on the ability of CGT shareholders to participate in the CGT Offer which are outside of their control and not solely due to a voluntary determination by the CGT shareholders.

The existence of any of the foregoing events or circumstances will be determined by us in our reasonable judgment. These conditions are for our sole benefit and may be asserted by us regardless of the circumstances giving rise to any of these conditions or may be waived (to the extent legally permissible) by us in whole or in part at any time and from time to time in our reasonable judgment. Our failure at any time to exercise any of these rights shall not be deemed a waiver of any of these rights; the waiver of any of these rights with respect to particular facts and other circumstances shall not be deemed a waiver with respect to any other facts and circumstances; and each of these rights shall be deemed an ongoing right that may be asserted at any time and from time to time. Any determination by us concerning the events described in this section “The Offers—Conditions to the U.S. Offer” will be final and binding on all parties.

The CGT Offer is subject to conditions that are substantially similar to the conditions to the TII Offer, except that the CGT Offer is not conditioned on the consummation of the TII Offer.

Expiration; Extension

The U.S. Offer will expire at 5:00 p.m., New York City time (4:00 p.m. Mexico City Time) on June 10, 2010, unless the U.S. Offer is extended. We intend for the U.S. Offer and the Mexican Offer to expire on the same date same date and, if either offer is extended, we intend to similarly extend the other offer. You should be

 

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aware that Euroclear and Clearstream will establish their own earlier cut-off times and dates for receipt of instructions to ensure that those instructions will be timely received by DTC prior to the expiration. If your TII ADSs are not available, you may also follow the guaranteed delivery procedures described in “Holders of TII ADSs—Guaranteed Delivery Procedures” below.

We may, from time to time, extend the period of time for which the U.S. Offer is open for any reason.

U.S. tender offer regulations require that we extend the expiration date of the U.S. Offer if we increase or decrease the consideration being offered within ten U.S. business days of the then-scheduled expiration date of the U.S. Offer, so that the U.S. Offer will expire no less than ten U.S. business days after the publication of the change. In order to ensure concurrent acceptance periods for both offers, the Mexican Offer will in such event be similarly extended. If we increase or decrease the consideration being offered in the TII Offer, the increased or decreased consideration will be paid to all holders of TII Securities whose TII Securities are accepted for exchange or purchase in the TII Offer regardless of whether those TII Securities were accepted for exchange or purchase prior to the change.

We will also extend the U.S. Offer, to the extent required by applicable U.S. tender offer rules, if we:

 

   

make a material change to the terms of the U.S. Offer, other than a change in the consideration being offered in the U.S. Offer;

 

   

make a material change in the information concerning the U.S. Offer; or

 

   

waive a material condition of the U.S. Offer.

We will also extend the U.S. Offer to the extent we extend the Mexican Offer if required by Mexican tender offer regulations or for any other reason.

If we extend the U.S. Offer, we will notify the exchange agent by written notice or by oral notice confirmed in writing. If we extend the U.S. Offer, we will make an announcement to that effect no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. We will announce any extension of the U.S. Offer by issuing a press release on, among others, the Dow Jones News Service. During an extension, any TII Securities validly tendered and not properly withdrawn will remain subject to the U.S. Offer and subject to the right of each holder to withdraw the TII Securities that such holder has previously tendered. If we extend the period of time during which the U.S. Offer is open, the U.S. Offer will expire at the latest time and date to which we extend the U.S. Offer.

Subject to the requirements of the U.S. tender offer rules (including U.S. tender offer rules that require that material changes to an offer be promptly disseminated to shareholders in a manner reasonably designed to inform them of such changes) and without limiting the manner in which we may choose to make any public announcement, we will not have any obligation to communicate any public announcement other than as described above.

Publication of Results

Promptly after the expiration of the TII Offer, we will publish the results by issuing a press release on, among others, the Dow Jones News Service. We will also make necessary filings with the SEC reflecting the results. Pursuant to Mexican law, we will notify the results of the TII Offer to the Mexican Stock Exchange the day after we receive such results. Within five business days after settlement of the TII Offer, the intermediary to the CNBV, the Mexican Stock Exchange and América Móvil must publicly announce the results.

 

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Procedures for Tendering in the U.S. Offer—Holders of TII L Shares and TII A Shares

When you tender your TII L Shares and TII A Shares in accordance with the procedures described in this section and we accept your TII L Shares and TII A Shares for exchange or purchase, this will constitute a binding agreement between you and us, subject to the terms and conditions of the U.S. Offer. If you are a U.S. resident and you are either a registered or beneficial owner on the books and records of Indeval of TII L Shares or TII A Shares and you wish to tender your TII L Shares or TII A Shares in the U.S. Offer, you must do so by book-entry transfer as described below. You will not be able to tender in the U.S. Offer any TII L Shares or TII A Shares in certificated form. If you hold TII L Shares or TII A Shares in certificated form you should promptly contact any broker, dealer, bank, trust company, financial institution or other nominee who is a participant in the book-entry transfer system of Indeval and arrange for such a nominee to hold the TII L Shares or TII A Shares on your behalf in book-entry form. You may have to pay fees and charges in connection with this process.

Any broker, dealer, bank, trust company or other nominee acting on your behalf that is a participant in Indeval may make delivery of TII L Shares or TII A Shares by causing Indeval to transfer such TII L Shares or TII A Shares into the Indeval account of Inversora Bursátil, S.A. de C.V.; Account number: 010202501; for forwarding to Banco Inbursa, S.A.; Account number: 28723-5, for the account of The Bank of New York Mellon, as the exchange agent, in accordance with the procedures of Indeval. In order to effect a tender of the TII L Shares or TII A Shares you own directly or beneficially, you should promptly contact your nominee and instruct it to tender such TII L Shares or TII A Shares. If you hold your TII L Shares or TII A Shares through a broker, dealer, bank, trust company or other nominee who is not an Indeval participant, such nominee, on your behalf, should promptly contact an Indeval participant and make arrangements for the tender of the TII L Shares or TII A Shares into the Indeval account of Inversora Bursátil, S.A. de C.V.; Account number: 010202501; for forwarding to Banco Inbursa, S.A.; Account number: 28723-5, for the account of The Bank of New York Mellon, as the exchange agent, in accordance with the procedures of Indeval on or prior to the expiration of the U.S. Offer.

A valid tender will be deemed to have been received only if (i) the exchange agent receives a confirmation from Banco Inbursa, as the custodian, of a book-entry transfer before expiration of the U.S. Offer of the TII L Shares or TII A Shares into the Indeval account at Inversora Bursátil for the account of the exchange agent and (ii) the Indeval participant through which such TII L Shares or TII A Shares were tendered delivers before the expiration of the U.S. Offer a duly completed and executed U.S. Form of Acceptance to the exchange agent. The book-entry transfer confirmation must be received by the exchange agent in accordance with the terms and conditions of the U.S. Offer by 5:00 p.m. New York time on June 10, 2010.

Any TII L Shares or TII A Shares being tendered must be delivered in accordance with the procedures described in this prospectus on or before the expiration of the U.S. Offer. There will be no guaranteed delivery procedures permitting delivery of the TII L Shares or TII A Shares after the expiration.

The registered or beneficial holder of TII L Shares or TII A Shares and its financial intermediary which instructs an Indeval participant to tender the TII L Shares or TII A Shares will be deemed to have caused the delivery by the Indeval participant and to have agreed to be bound by, and to bind the holder on whose behalf the Indeval participant has acted, to the terms and conditions of the U.S. Offer and that América Móvil may enforce such agreement against such holder and the tendering Indeval participant.

The method and delivery of the TII L Shares and TII A Shares and all other documents or instructions is at the risk of the holders of the participating shareholder.

Matters concerning validity, eligibility and acceptance. All questions as to the form of documents and the validity, eligibility (including time of receipt) and acceptance for exchange or purchase of any tender of TII L Shares or TII A Shares will be determined by us, in our sole discretion, which determination shall be final and binding. We reserve the absolute right to reject any or all tenders of TII L Shares or TII A Shares determined by us not to be in proper form or the acceptance for exchange or purchase for which may, in the opinion of our

 

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counsel, be unlawful. We also reserve the absolute right to waive any defect or irregularity in any tender of TII L Shares or TII A Shares. Neither we, the exchange agent, Banco Inbursa, the information agent nor any other person will be under any duty to give notification of any defect or irregularity in tenders or incur any liability for failure to give any such notification.

If you are in any doubt about the procedure for tendering TII L Shares or TII A Shares into the U.S. Offer, please contact the DF King  & Co. Inc., the information agent, at its address and telephone number as it appears on the back cover of this prospectus.

Procedure For Tendering in the U.S. Offer—Holders of TII ADSs

Holders of TII ADSs in Certificated Form

If you are a registered holder of (that is, if you hold on the books of the TII Depositary, and hold ADRs evidencing your ownership of TII ADSs), you will need to do each of the following before the expiration date:

 

   

complete and execute the ADS letter of transmittal in accordance with the instructions on the form; and

 

   

deliver the properly completed and duly executed ADS letter of transmittal, together with the ADRs evidencing your TII ADSs and any other documents specified in the ADS letter of transmittal, to the exchange agent.

Your signature on the ADS letter of transmittal in some circumstances must be guaranteed by a financial institution eligible to do so because it is a participant in the Securities Transfer Agents Medallion Program, the New York Stock Exchange Medallion Program or the Stock Exchange Medallion Program (referred to in this prospectus as “eligible institutions”). Most banks, savings and loans associations and brokerage houses are participants in these programs and therefore eligible institutions. You do not need to have your signature guaranteed by an eligible institution if (i) you are the registered holder of TII ADSs tendered and you have not completed the box entitled “Special Transfer Instructions” in the ADS letter of transmittal; or (ii) you are tendering TII ADSs for the account of an eligible institution.

If TII ADSs are forwarded to the exchange agent in multiple deliveries, a properly completed and duly executed ADS letter of transmittal must accompany each delivery. You may also only tender TII L ADRs with a TII L ADSs letter of transmittal and TII A ADSs with a TII A ADSs letter of transmittal.

If TII ADSs are registered in the name of a person other than the signatory of the ADS letter of transmittal, then the tendered ADRs must be endorsed or accompanied by appropriate stock powers. The stock powers must be signed exactly as the name or names of the registered owner or owners appear on the ADRs, with the signature on the ADRs or stock powers guaranteed as described above.

If you fail to correctly deliver your letter of transmittal and your ADRs evidencing your TII ADSs before expiration of the U.S. Offer, your tender may not be valid and your ADRs evidencing your TII ADSs may not be accepted.

Holders of TII ADSs in through Direct Registration, the TII Global Invest Direct Plan or otherwise on the books of the TII Depositary

If you hold your TII ADSs in uncertificated form through Direct Registration, the TII Global Invest Direct Plan or otherwise on the books of the TII Depositary, you must sign and deliver an ADS letter of transmittal as described above, but you do not need to deliver an ADR evidencing your TII ADSs held by you in the TII Global Invest Direct Plan or on the books of the TII Depositary.

In any of the above cases, you may only tender TII A ADSs with a TII A ADS letter of transmittal and TII L ADSs with a TII L ADS letter of transmittal.

 

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Holders of TII ADSs held through a bank, broker or other nominee

If you are not a registered holder of TII ADSs on the books of the TII Depositary but instead hold your TII ADSs with a bank, broker, dealer, trust company or other financial intermediary or nominee), you will need to timely instruct your agent to tender TII ADSs on your behalf before the expiration date by:

 

   

causing DTC to transmit an agent’s message via DTC’s confirmation system to the exchange agent stating that DTC has received an express acknowledgment from a participant in DTC that the participant tendering TII ADSs has received and agrees to be bound by the terms and conditions of the U.S. Offer stated in this prospectus and the ADS letter of transmittal; and

 

   

making a book-entry transfer of the applicable TII ADSs as described below to the account established by the exchange agent at DTC for the purpose of receiving these transfers.

You are cautioned to provide sufficient time to complete a valid tender prior to the expiration of the U.S. Offer.

The exchange agent will establish an account at DTC with respect to the TII ADSs held in DTC for purposes of the U.S. Offer. Any financial institution that is a participant in DTC’s systems may make delivery of TII ADSs by causing DTC to transfer TII ADSs into the exchange agent’s account at DTC. This must be done in accordance with DTC’s procedure for book-entry transfers.

Please refer to the materials forwarded to you by your agent to determine the manner in which you can timely instruct your agent to take these actions. Delivery of documents to DTC in accordance with DTC’s procedures does not constitute delivery to the exchange agent.

Provisions Concerning Acceptances

If you deliver an ADS letter of transmittal, ADRs evidencing TII ADSs and other required documents, or your agent delivers an agent’s message and makes a book-entry transfer of your TII ADSs to the exchange agent, then you will be deemed, without any further action by the exchange agent, to have accepted the U.S. Offer with respect to such TII ADSs, subject to the terms and conditions set forth in this prospectus and the ADS letter of transmittal.

Your acceptance of the U.S. Offer by tendering pursuant to these procedures, subject to your right to withdraw, will constitute a binding agreement between you and América Móvil on the terms of the U.S. Offer. If you tender TII ADSs, then TII Shares represented by such TII ADSs may not be tendered by you.

The method of your delivery of TII ADSs, the ADS letter of transmittal and all other required documents is at your option and risk. TII ADSs will be deemed delivered only when actually received by the exchange agent. In all cases, sufficient time should be allowed to ensure a timely delivery. We recommend that you send the materials by overnight courier, by hand delivery or by registered mail with return receipt requested and proper insurance. Delivery should be effected as soon as possible but no later than the expiration date of the U.S. Offer, which is 5:00 p.m. New York City time on June 10, 2010, unless the U.S. Offer is extended. You should be aware that Euroclear and Clearstream will establish their own earlier cut-off times and dates for receipt of instructions to ensure that those instructions will be timely received by DTC prior to the expiration.

ADS Letter of Transmittal

If you or someone acting on your behalf executes an ADS letter of transmittal or delivers an agent’s message, you are representing and warranting to us and agreeing with us that:

 

   

you sell, assign and transfer to, or upon the order of, América Móvil all right, title and interest in and to all the TII ADSs (and the TII Shares represented thereby) being tendered and all dividends, distributions and rights declared, paid or distributed in respect of such TII Shares or securities on or after the settlement of the U.S. Offer (collectively, “distributions”);

 

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you irrevocably appoint the exchange agent your true and lawful agent and attorney-in-fact, with full knowledge that the exchange agent is also acting as the agent of América Móvil in connection with the U.S. Offer, with respect to such TII Shares, TII ADSs and distributions, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest):

 

   

to have the TII ADRs and any distributions delivered to the exchange agent at DTC, together, in any such case, with all accompanying evidences of transfer and authenticity to the exchange agent or upon the order of the exchange agent, in each case acting upon the instructions of América Móvil;

 

   

to surrender such ADSs to the TII Depositary for the purpose of withdrawal of the underlying TII Shares in accordance with the ADS deposit agreement;

 

   

to instruct the TII Depositary to deliver the TII Shares underlying the TII ADSs to the exchange agent’s account at Inversora Bursátil, S.A. de C.V., or transfer ownership of such TII Shares underlying the TII ADSs on the account books maintained with respect to the TII Shares, together, in any such case, with all accompanying evidences of transfer and authenticity, to or upon the order of América Móvil; and

 

   

to receive all benefits and otherwise exercise all rights of beneficial ownership of such TII ADSs, the underlying TII Shares (and all such other TII Shares or securities) and any distributions, all in accordance with the terms and conditions of the U.S. Offer.

 

   

you shall have no further rights with respect to the tendered TII ADSs (including the underlying TII Shares), except that you shall have a right to receive from América Móvil the appropriate consideration in accordance with the terms and conditions of the U.S. Offer;

 

   

you irrevocably appoint each designee of América Móvil or one or more of its affiliates as your attorneys-in-fact and proxies, each with full power of substitution, to vote at any annual or special meeting of Telmex Internacional’s shareholders or any adjournment or postponement thereof or otherwise in such manner as each such attorney-in-fact and proxy or his or her substitute shall in his or her sole discretion deem proper, to execute any written consent concerning any matter as each such attorney-in-fact and proxy or his or her substitute shall in his or her sole discretion deem proper, in each case with respect to all of the TII ADSs (including the underlying TII Shares and any and all distributions) tendered hereby and accepted for payment by América Móvil;

 

   

you have full power and authority to accept the U.S. Offer and to sell, assign and transfer the TII ADSs in respect of which the U.S. Offer is accepted or deemed to be accepted (including the underlying TII Shares and any and all other of Telmex Internacional’s shares, securities or rights issued or issuable in respect of the TII L ADSs) tendered and that when the TII L ADSs are accepted for exchange or purchase by América Móvil, América Móvil will acquire good title thereto, free from all liens, charges, equities, encumbrances, and other interests and together with all rights now or hereinafter attaching thereto, including, without limitation, voting rights and the right to receive all amounts payable to a holder thereof in respect of dividends, interests and other distributions, if any, declared, made or paid after May 11, 2010 with respect to the TII ADSs in respect of which the U.S. Offer is accepted or deemed to be accepted;

 

   

you will, upon request, execute and deliver any additional documents deemed by the exchange agent or América Móvil to be necessary or desirable to complete the sale, assignment and transfer of the TII ADSs (including the underlying TII Shares) tendered, accompanied by appropriate documentation of transfer, and, pending such remittance and transfer or appropriate assurance thereof, América Móvil shall be entitled to all rights and privileges as owner of each such distribution and may withhold the entire consideration due under the U.S. Offer for the exchange or purchase of the TII L Shares represented by the TII L ADSs tendered hereby or deduct from such consideration the amount or value of such distribution as determined by América Móvil in its sole discretion.

 

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Participating holders of TII ADSs may elect to receive AMX L ADSs, cash or a combination of AMX L ADSs and cash. Participating holders of TII A Shares or TII L Shares may elect to receive AMX L Shares, cash or a combination of AMX L Shares and cash.

DELIVERY OF DOCUMENTS TO A FINANCIAL INTERMEDIARY OR TO A DTC PARTICIPANT’S BOOK-ENTRY TRANSFER ACCOUNT DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.

Tendered TII ADSs will be held in an account controlled by the exchange agent, and consequently you will not be able to sell, assign, transfer or otherwise dispose of your TII ADSs until such time as (i) you withdraw your TII ADSs from the U.S. Offer; (ii) your TII ADSs have been exchanged (subject to the terms and conditions of the U.S. Offer) or you have received payment for your TII ADSs, as applicable; or (iii) your TII ADSs have been returned to you if the U.S. Offer is not completed or because they were not accepted for exchange.

Guaranteed Delivery Procedures

If you wish to tender your TII ADSs in the U.S. Offer and your TII ADSs are not immediately available or time will not permit all required documents to reach the exchange agent before the expiration of the U.S. Offer or the procedure for book-entry transfer cannot be completed on a timely basis, you may nevertheless properly tender your TII ADSs if all the following conditions are satisfied:

 

   

your tender is made by or through an eligible institution;

 

   

a properly completed and duly executed notice of guaranteed delivery, substantially in the form provided with this document, is received by the exchange agent as provided below before the expiration of the U.S. Offer; and

 

   

TII ADSs in proper form for transfer, together with, in the case of tenders by a registered holder of TII ADSs, a properly completed and duly executed letter of transmittal, together with any required signature guarantees or, in the case of a book-entry transfer, a book-entry confirmation along with an agent’s message and any other required documents, are received by the exchange agent within three NYSE trading days after the date of execution of the notice of guaranteed delivery. A NYSE trading day is a day on which the NYSE is open for business.

Any notice of guaranteed delivery may be delivered by hand, mail or facsimile to the exchange agent and must include a guarantee by an eligible institution in the form set forth in the notice of guaranteed delivery. In the case of TII ADSs held through the book-entry transfer system of DTC, the notice of guaranteed delivery must be delivered to the exchange agent by a DTC participant by means of the DTC book-entry transfer confirmation system.

Matters concerning validity, eligibility and acceptance

All questions as to the form of documents and the validity, eligibility (including time of receipt) and acceptance for purchase of any tender of TII ADSs will be determined by us, in our sole discretion, which determination shall be final and binding. We reserve the absolute right to reject any or all tenders of TII ADSs determined by us not to be in proper form or the acceptance for purchase of or purchase for which may, in the opinion of our counsel, be unlawful. We also reserve the absolute right to waive any defect or irregularity in any tender of TII ADSs. None of us, the exchange agent, the information agent, or any other person will be under any duty to give notification of any defect or irregularity in tenders or incur any liability for failure to give any such notification.

THE METHOD OF DELIVERY OF TII ADSs AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING THROUGH DTC, IS AT THE OPTION AND RISK OF THE TENDERING SECURITY

 

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HOLDER AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE A TIMELY DELIVERY. REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED FOR TII ADSs SENT BY MAIL.

If you are in any doubt about the procedure for tendering TII ADSs into the U.S. Offer, please contact the information agent, at its address and telephone numbers as they appear on the back cover of this prospectus.

Withdrawal Rights

TII Securities tendered for exchange or purchase into the U.S. Offer may be properly withdrawn at any time prior to the expiration of the U.S. Offer (including any extensions thereof). Once the U.S. Offer has expired, you will not be able to withdraw any tendered TII Securities.

You may not rescind a withdrawal. If you withdraw tendered TII Securities, they will be deemed not validly tendered for purposes of the U.S. Offer. However, you may re-tender properly withdrawn TII Securities at any time before the expiration of the U.S. Offer (including any extensions thereof) by following the procedures described under “—Procedures for Tendering TII L Shares and TII A Shares” and “—Procedures for Tendering TII ADSs” above. The withdrawal rights in the Mexican Offer are similar to the withdrawal rights in the U.S. Offer.

For a withdrawal of tendered TII Securities to be effective, a written or facsimile transmission notice of withdrawal, in either case with original signature, must be timely received by the exchange agent at its address set forth on the back cover of this prospectus and must specify the name of the person who tendered the TII Securities to be withdrawn, the number of TII Securities to be withdrawn and the name of the registered holder of the TII Securities, if different from that of the person who tendered such TII Securities. For a withdrawal of tendered TII Securities to be effective, a signed notice of withdrawal must be received by the exchange agent prior to the expiration of the U.S. Offer. The signature on a notice of withdrawal must be guaranteed if a signature guarantee was required on the original letter of transmittal. In addition, such notice must specify, in the case of TII ADSs tendered by delivery of ADRs, the name of the registered holder (if different from that of the tendering TII ADS holder) and the serial numbers shown on the particular ADRs evidencing the TII ADSs to be withdrawn or, in the case of TII Securities tendered by book-entry transfer, the name and participant number at DTC or Indeval, as the case may be, to be credited with the properly withdrawn TII Securities.

All questions as to the form and validity (including time of receipt) of any notice of withdrawal will be determined by us, in our sole discretion, which determination shall be final and binding. Neither we, the exchange agent, the information agent nor any other person will be under any duty to give notification of any defect or irregularity in any notice of withdrawal or incur any liability for failure to give any such notification.

Acceptance of Tendered TII Securities and Settlement of the U.S. Offer

Upon the expiration of the U.S. Offer (including any extensions thereof), if the conditions referred to under “—Conditions to the U.S. Offer” have been satisfied or, to the extent legally permitted, waived, we will accept for exchange or purchase and will exchange or pay, as applicable, for all TII Securities that have been validly tendered and not properly withdrawn pursuant to the terms of the U.S. Offer and procure the issuance of AMX L Shares, AMX L ADSs or cash, as applicable, for the account of the tendering holders no later than six business days after we announce that we have accepted tendered TII Securities for exchange or purchase.

Under no circumstances will interest be paid on the exchange of TII L Shares, TII A Shares or TII ADSs, regardless of any delay in making the exchange or any extension of the TII Offer.

 

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Exchange or purchase for tendered TII Securities pursuant to the U.S. Offer will be made only after timely receipt by the exchange agent of:

 

   

in the case of TII L Shares and TII A Shares, book-entry transfer of the TII L Shares or TII A Shares to the Indeval account of Inversora Bursátil, S.A. de C.V.; Account number: 010202501; for forwarding to Banco Inbursa, S.A.; Account number: 28723-5, for the account of The Bank of New York Mellon, as the exchange agent, in accordance with the procedures of Indeval, and a properly completed and duly executed U.S. Form of Acceptance from the Indeval participant holding the TII L Shares or TII A Shares on behalf of the tendering TII L Share holder or TII A Share holder;

 

   

in the case of TII ADSs held in certificated form by registered holders, the ADRs evidencing those TII ADSs (endorsed or accompanied by proper documents of transfer if tendered other than by the registered holder) and a properly completed and duly executed letter of transmittal with original signatures and all other required documents, as described above under the section captioned “The Offers—Procedure for Tendering in the U.S. Offer—Holders of TII ADSs in Certificated Form”;

 

   

in the case of TII ADSs held in uncertificated form through Direct Registration, the TII Global Invest Direct Plan or otherwise on the books of the TII Depositary, a properly completed and duly executed letter of transmittal with original signatures and all other required documents, as described above under the section captioned “The Offers—Procedure for Tendering in the U.S. Offer—Holders of TII ADSs in Uncertificated Form”; and

 

   

in the case of TII ADSs tendered by book-entry transfer, book-entry transfer of the TII ADSs to the DTC account of the exchange agent together with a properly completed and duly executed letter of transmittal (or facsimile thereof), in either case with an original signature, or an agent’s message (as described below) instead of the letter of transmittal, and all other required documents, as described above under the section captioned “The Offers—Procedure for Tendering in the U.S. Offer—Holders of TII ADSs in Book-entry Form”.

Cash Payment

The purchase price for the TII Securities accepted for purchase pursuant to the U.S. Offer will be the U.S. dollar equivalent of the applicable Mexican peso price of the U.S. Offer, based on the U.S. dollar / Mexican peso spot market on the day the custodian receives the cash consideration in Mexican pesos. You will bear all exchange rate risks and costs. None of the exchange agent, the custodian or us are responsible for the custodian in fact being able to arrange for the conversion to U.S. dollars of the Mexican pesos it receives as a result of exchange controls or otherwise, or for the exchange rate at which such conversion ultimately occurs. The purchase price for the TII Securities tendered in the Mexican Offer will be paid in Mexican pesos. Security holders should be aware that they will bear additional exchange rate risks should the U.S. Offer be extended.

The cash consideration to be paid in the U.S. Offer to tendering holders of TII Securities will first be paid by América Móvil to Banco Inbursa S.A., as custodian, in Mexican pesos. The custodian will then arrange for the conversion of the consideration into U.S. dollars, net of fees and expenses, using the U.S. dollar / Mexican peso spot market on the day the custodian receives the cash consideration in Mexican pesos. Approximately two days after confirmation of the receipt of the cash consideration in Mexican pesos by the custodian, participants in the U.S. Offer will receive payment in U.S. dollars for any TII L Shares, TII A Shares and TII ADSs validly tendered for cash. Payment for TII Securities directly registered by holders holding in certificated or uncertificated form will be made by check to the tendering TII ADS holder and, in the case of the TII L Shares or TII A Shares, to the Indeval participant.

 

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Payment for TII ADSs tendered by book-entry transfer will be made by crediting the account of the nominee holding the TII ADSs on your behalf with DTC. If you tender your TII L ADSs and/or TII A ADSs for cash by means of DTC’s book-entry confirmation facilities, the exchange agent will deliver the applicable amount of consideration in U.S. dollars to DTC, which will further allocate the applicable amount of consideration in U.S. dollars to the account of the DTC participant who tendered the TII L ADSs and/or TII A ADSs on your behalf. If you tender your TII L ADSs and/or TII A ADSs for cash to the exchange agent by means of a physical certificate delivery with a completed and signed letter of transmittal or by means of a letter of transmittal for ADSs in uncertificated form held through Direct Registration, in the TII Global Invest Plan or otherwise on the books of the TII Depositary, the exchange agent will issue a check for the applicable amount of consideration in U.S. dollars. Payment for TII L Shares or TII A Shares will be made by check to the Indeval participant. All cash payments will be made approximately six business days after the publication of the final results of the U.S. Offer and the Mexican Offer.

In addition, the exchange agent will aggregate the fractional TII L Shares, TII A Shares and TII ADSs, execute a sale and deliver the net proceeds in U.S. dollars on a pro rata basis.

Delivery of AMX L Shares

If you caused a valid tender of your TII A Shares and/or your TII L Shares for AMX L Shares through an Indeval participant, the exchange agent will instruct Banco Inbursa to cause the applicable number of AMX L Shares to be delivered to each Indeval participant for which a valid tender was received.

Delivery of AMX L ADSs

If you tender your TII L ADSs and/or TII A ADSs for AMX L ADSs by means of DTC’s book-entry confirmation facilities, the exchange agent will deliver the applicable number of AMX L ADSs to DTC, which will further allocate the appropriate number of AMX L ADSs to the account of the DTC participant who tendered the TII L ADSs and/or TII A ADSs on your behalf. If you tender your TII L ADSs and/or TII A ADSs for AMX L ADSs to the exchange agent by means of a physical certificate delivery with a completed and signed letter of transmittal or by means of a letter of transmittal for ADSs in uncertificated form held through Direct Registration, in the TII Global Invest Direct Plan or otherwise on the books of the TII Depositary, the exchange agent will cause the applicable number of whole AMX L ADSs to be registered in your name on an uncertificated basis and you will receive a Direct Registration statement confirming that registration.

Purchases of TII Securities After Expiration of the TII Offer

Delisting in Mexico

The TII L Shares and TII A Shares will continue to trade on the Mexican Stock Exchange unless (a) the CNBV authorizes the cancellation of the registration of the TII Shares in the National Securities Registry of the CNBV (“deregistration”) and (b) the Mexican Stock Exchange effects the delisting of the TII L Shares and the TII A Shares. The Mexican Securities Law provides that the CNBV shall authorize deregistration and delisting if the interests of minority shareholders and the market in general have been adequately protected. Under Mexican law, among other conditions, we would be required to obtain approval of the holders of at least 95% of the outstanding TII Shares (with all series voting as a single class), including any TII Shares we acquire in the TII Offer or otherwise, voting at a shareholders meeting to approve resolutions permitting deregistration and delisting. If we do not reach the 95% ownership level immediately following consummation of the TII Offer, we may pursue other transactions in the future that would increase our direct and indirect ownership to that level. We do not have any current intention to engage in such transactions or as to the terms and conditions of any such transaction, although we expect to evaluate potential future transactions based on our ownership level and the other facts and circumstances in existence following the TII Offer.

If the applicable legal requirements for deregistration and delisting are met following the consummation of the TII Offer, we intend to take the steps necessary to obtain such approval and to seek the authorization of the CNBV for deregistration and delisting. However, the primary purpose of the TII Offer and the CGT Offer is to

 

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acquire (directly and indirectly through CGT) up to 100% of the outstanding shares of Telmex Internacional. Only after completion of the offers and complying with applicable legal requirements and obtaining necessary corporate authorizations, would we then seek the authorization of the CNBV for deregistration and delisting.

Even if the shareholders of Telmex Internacional do approve deregistration and delisting by a vote of 95% or more of the TII Shares, it is possible that the CNBV would not provide the necessary authorization. In either such case, Telmex Internacional will continue to be a registered public company in Mexico and the TII Shares will remain listed on the Mexican Stock Exchange.

We cannot provide any assurances that any deregistration and delisting of the TII Shares will occur in Mexico or as to the timing of any such deregistration and delisting.

Subsequent Purchases of TII Securities

In the event that the deregistration and delisting of the TII Shares in Mexico is obtained, the CNBV may require, in accordance with applicable provisions of the Mexican Securities Law, that Telmex Internacional establish a trust (fideicomiso) holding AMX L Shares and cash sufficient to purchase, any TII Shares that remain outstanding following completion of the TII Offer (the “TII Repurchase Trust”). The TII Repurchase Trust would offer to purchase TII Shares for a period of six months from the date that the registry of the TII Shares is cancelled.

If the size of the public float after the TII Offer is greater than 300,000 unidades de inversion (investment units or “UDIs”) (Ps. 1,337,637 as of April 26, 2010), we may be required by the CNBV to make an additional offer for TII Securities. The consideration offered by us as part of any such additional offer under applicable Mexican law would be the greater of the trading price of the TII Securities and their book value. We may be able to offer a different price in any such additional offer, subject to prior approval from the CNBV, based upon Telmex Internacional’s financial condition and prospects at the time and after approval of such price by Telmex Internacional’s board of directors, taking into consideration the opinion of its Audit and Corporate Practices Committee in accordance with Mexican law. Any such consideration may be different than that offered in the TII Offer.

The circumstances that would lead to the establishment of the TII Repurchase Trust, or to our making an additional offer for TII Securities, may not arise or may occur only after significant delays. There can accordingly be no assurance that there will be a TII Repurchase Trust or that we will make an additional offer or as to the timing of any TII Repurchase Trust or any such additional offer.

After completion of the TII Offer, we or Telmex Internacional may also acquire TII Securities, including by means of open market purchases or privately negotiated purchases.

U.S. Delisting and Deregistration

If Telmex Internacional obtains deregistration and delisting in Mexico, we also intend to cause Telmex Internacional to take the steps necessary to delist the TII ADSs from the NYSE, terminate the deposit agreements for the TII ADSs, and terminate the registration of the TII L Shares and the TII A Shares under the Exchange Act.

Even if Telmex Internacional does not obtain deregistration and delisting in Mexico, we may decide to cause Telmex Internacional to delist from the NYSE, terminate the deposit agreements and deregister under the Exchange Act. We may make this decision separately (1) for the TII L Shares and TII L ADSs and (2) for the TII A Shares and TII A ADSs. The decision would depend on the results of the TII Offer and any additional subsequent purchases, and on our management’s evaluation of the public float, trading volumes and liquidity of the TII ADSs after completion of the TII Offer. If we took these steps without obtaining deregistration and delisting in Mexico, a holder of TII Shares would still have the ability to sell those shares in the Mexican Stock Exchange.

 

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Subsequent Offering Period

We may elect, at our sole discretion, to have a subsequent offering period in the United States of at least three business days that would start immediately following the expiration of the TII Offer.

During the subsequent offering period, if one is provided, remaining holders of TII Securities may tender, but not withdraw, their TII Securities not previously tendered. TII Securities previously tendered and accepted for exchange in the U.S. Offer will not have the benefit of any further withdrawal rights. A subsequent offering period, if one is provided, will not affect the timing of the acceptance and delivery of TII Securities previously tendered and accepted for exchange or purchase in the U.S. Offer, as described above under “—Acceptance of Tendered TII Securities.”

As mentioned above, holders of TII Securities that tender their TII Securities during any subsequent offering period will not have withdrawal rights, and we will accept for exchange or purchase any TII Securities validly tendered during any subsequent offering period immediately and will pay or deliver AMX Securities in exchange for such TII Securities promptly. The consideration paid during any subsequent offering period will be the same consideration offered in the initial offer period.

Brokerage Fees

Neither we nor the exchange agent for the U.S. Offer will charge any brokerage fee in connection with the U.S. Offer. However, you should check with the broker, dealer, bank, trust company, custodian or other securities intermediary through whom you hold your TII Securities as to whether they will charge any transaction fee in connection with your tender. We will not pay any such fees.

U.S. Tax Considerations

U.S. Federal Income Tax Considerations

The following is a summary of certain U.S. federal income tax consequences of the exchange of TII Securities for AMX Securities. The discussion set forth below is only applicable to U.S. Holders (as defined below) that tender TII Securities in the TII Offer. This discussion addresses only beneficial owners of TII Securities that hold such shares as capital assets.

The summary does not purport to be a comprehensive description of all of the tax consequences of the TII Offer. The summary does not apply to special classes of U.S. Holders such as dealers in securities or currencies, holders with a functional currency other than the U.S. dollar, holders that are considered under U.S. federal income tax rules to own 5% or more of Telmex Internacional by vote or value (or will own 5% or more of América Móvil by vote or value after the exchange offer), tax-exempt organizations, banks or other financial institutions, regulated investment companies, entities that are treated for U.S. federal income tax purposes as partnerships or other pass-through entities, holders liable for the alternative minimum tax, securities traders electing mark-to-market treatment, and persons holding their TII Securities in a hedging transaction or as part of a straddle or conversion transaction. In addition, the discussion does not address the state, local or foreign tax consequences (or other tax consequences such as estate or gift tax consequences) of the TII Offer. The discussion below is based upon the provisions of the Internal Revenue Code (“Code”) and U.S. Treasury regulations, rulings and decisions hereunder as of the date hereof, and such authorities may be repealed, revoked or modified (with possible retroactive effect) so as to result in U.S. federal income tax consequences different from those discussed below.

Holders should consult their own tax advisors concerning the tax consequences of the TII Offer, as well as any consequences arising under the laws of any other taxing jurisdiction.

As used in this subsection—“U.S. Federal Income Tax Considerations,” the term “U.S. Holder” means a beneficial holder of TII Securities that is (1) a citizen or resident of the United States of America, (2) a corporation, or other entity taxable as a corporation, organized under the laws of the United States of America or any state thereof, or (3) otherwise subject to U.S. federal income taxation on a net income basis in respect of the TII Securities.

 

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U.S. Holders of TII ADSs

Under general U.S. federal income tax principles, a U.S. Holder of TII ADSs should be treated as the beneficial owner of the corresponding number of TII Shares held by the TII ADS depositary, and references herein to TII Shares refer also to TII ADSs representing the TII Shares. Similarly, a U.S. Holder of AMX ADSs should be treated as the beneficial owner of the corresponding number of AMX Shares held by the AMX ADS depositary, and references herein to AMX Shares also refer to the AMX ADSs representing the AMX Shares.

Consequences of the TII Offer

It is the opinion of Cleary Gottlieb Steen & Hamilton LLP (“CGSH”) that the TII Offer together with the CGT Offer should be treated as a single, integrated transaction described in Section 351 of the Code. This opinion is based on certain representations that CGSH has received from América Móvil and on certain assumptions, which we believe are reasonable, including the assumption that the Slim Family and certain related entities and AT&T will tender all their TII Securities in the TII Offer and all their CGT shares in the CGT Offer, and will elect to receive AMX Securities in exchange for all their TII Securities, and will elect to receive AMX Securities in exchange for all their CGT shares. However, such treatment is not binding on the Internal Revenue Service (“IRS”) and América Móvil and Telmex Internacional have not sought and will not seek any ruling from the IRS regarding any matters relating to the TII Offer or the CGT Offer, and as a result, there can be no assurance that the IRS will not assert, or that a court would not sustain, a contrary position.

Based on the opinion described above, a U.S. Holder that receives solely AMX Securities in exchange for TII Securities should not recognize gain or loss upon such exchange (except as described below with respect to cash that is received with respect to a fractional AMX Share or ADS). Accordingly, (i) the aggregate tax basis of the AMX Securities received by the U.S. Holder should be the same as the aggregate tax basis of the TII Securities surrendered in exchange pursuant to the TII Offer (adjusted with respect to fractional shares) and (ii) the holding period of the AMX Securities should include the holding period of the TII Securities surrendered pursuant to the TII Offer.

If a U.S. Holder elects to receive both cash and AMX Securities in exchange for its TII Securities, gain but not loss should be recognized equal to the lesser of (a) the U.S. dollar value of any cash consideration received and (b) the amount by which the sum of the fair market value of the AMX Securities received pursuant to the offer (including cash received from the sale of fractional entitlements of AMX Securities) and the U.S. dollar value of any cash consideration received exceeds the U.S. Holder’s aggregate tax basis of the TII Securities surrendered (adjusted with respect to fractional shares).

In the event that the TII Offer together with the CGT Offer were not a single, integrated transaction described in Section 351 of the Internal Revenue Code, the exchange of TII Securities for AMX Securities will be a taxable exchange for U.S. federal income tax purposes. U.S. holders of TII Securities whose TII Securities are exchanged in the TII Offer will generally recognize gain or loss on the exchange of TII Securities for AMX Securities equal to the difference between (x) the sum of the fair market value of the AMX Securities received pursuant to the TII Offer (including cash received from the sale of fractional entitlements of AMX Securities) and (y) the U.S. holder’s adjusted tax basis in the TII Securities. Such gain or loss generally will be capital gain or loss. Capital gains of individuals derived with respect to capital assets held for more than one year at the time the TII Securities are exchanged are eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations. Any gain or loss will generally be U.S. source. U.S. Holders will have an adjusted basis in their AMX Securities equal to the U.S. dollar value of the AMX Securities as of the date of the exchange. A U.S. Holder’s holding period in the AMX Securities will begin on the day after the date of the exchange.

The exchange of TII Securities for solely cash (rather than of AMX Securities) will be a taxable transaction for U.S. federal income tax purposes. Accordingly, a U.S. Holder that receives cash in exchange for its TII Securities will generally recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference between (x) the amount of cash received (valued as described below) and (y) the U.S. Holder’s adjusted tax basis

 

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in the TII Securities exchanged. Such gain or loss generally will be capital gain or loss. Capital gains of individuals derived with respect to capital assets held for more than one year at the time the TII Securities are exchanged are eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations. Any gain or loss will generally be U.S. source.

A U.S. Holder that receives cash with respect to a fractional AMX Security in the TII Offer should be treated as having received such fractional share pursuant to the TII Offer and then as having sold such fractional share for cash. The amount of any capital gain or loss attributable to such sale should be equal to the difference between the cash received with respect to the fractional share and the ratable portion of the tax basis of the TII Securities surrendered that is allocated to such fractional share.

U.S. Information Reporting and Backup Withholding

In general, information reporting requirements will apply to the cash payments received pursuant to the TII Offer to U.S. Holders other than certain exempt recipients (such as corporations), and backup withholding may apply to such amounts if the U.S. Holder fails to provide an accurate taxpayer identification number and make any other required certification or otherwise establish an exemption. The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a refund or a credit against the U.S. Holder’s U.S. federal income tax liability so long as the required information is provided to the IRS.

Backup withholding and information reporting will not generally apply to the cash payments made pursuant to the TII Offer that are received by a non-U.S. Holder if such holder certified under penalties of perjury that such holder is a non-U.S. person for federal income tax purposes.

Accounting Treatment

Under Mexican FRS and U.S. GAAP, we will account for the acquisition of control of Telmex Internacional through the CGT Offer as a combination of entities under common control, and the TII Offer as a purchase of non-controlling interest.

Dividend Rights

You will receive any dividends on the AMX L Shares or AMX L ADSs in respect of dividends that have a record date that falls after the settlement date of the TII Offer.

Stock Exchange Listings

The AMX L Shares are listed on the Mexican Stock Exchange and on the Mercado de Valores Latinoamericanos en Euros (LATIBEX). The AMX L ADSs are listed on the New York Stock Exchange and on the Frankfurter Wertpapierbörse. Provided that you are not an affiliate of either América Móvil or Telmex Internacional, we expect that you will be able to sell your AMX L Shares and AMX L ADSs on each stock exchange on which such shares are listed, so long as your broker or other securities intermediary has the ability to execute transactions on that exchange. If you are an affiliate, there will be some restrictions on your ability to resell.

Appraisal Rights

Neither the holders of TII Shares or TII ADSs are entitled under Mexican law or otherwise to appraisal rights with respect to the TII Offer.

Shareholders Approval

At a general ordinary shareholders’ meeting held in Mexico City on March 17, 2010, the shareholders of América Móvil voted to approve the making of the TII Offer and the CGT Offer.

 

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Persons Employed, Retained, Compensated or Used

We have retained The Bank of New York Mellon, acting through BNY Mellon Shareowner Services, as our exchange agent in connection with the TII Offer. We have also retained D.F. King & Co., Inc. as our information agent in connection with the TII Offer.

We have not employed or retained any persons to make solicitations or recommendations in connection with the TII Offer and the CGT Offer. We have also not engaged any employees of Telmex Internacional in connection with the TII Offer and the CGT Offer.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling América Móvil, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

 

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SOURCE AND AMOUNT OF FUNDS

The amount of funds we will require to complete the TII Offer will depend primarily on whether tendering holders of TII Securities elect to receive AMX Securities or cash. If all the holders of TII Securities (other than CGT, which has announced that it will not participate in the TII Offer) elect to receive cash, the total cash consideration we are required to pay, including fees and expenses, will be approximately Ps. 82,495 million (estimated at U.S.$6,360 million, based on the exchange rate on May 21, 2010). None of the U.S. Offer, the Mexican Offer or the CGT Offer is conditioned on any financing arrangements.

We have sufficient cash and cash equivalents on hand to complete the TII Offer even if it requires the maximum possible amount of cash. Our cash and cash equivalents as of December 31, 2009 amounted to Ps. 27,446 million, equivalent to approximately U.S.$2.1 billion at the December 31, 2009 exchange rate. Since then, we have taken advantage of favorable market conditions to raise a substantial amount of additional funds by issuing debt securities in different markets. In March 2010, we issued three series of peso-denominated notes in the domestic Mexican market, consisting of Ps. 4,600 million in notes maturing in 2015, Ps. 7,000 million in notes maturing in 2020 and Ps. 3,271 million in notes maturing in 2025. Later in March 2010, we issued three series of U.S. dollar-denominated notes in the international market, consisting of U.S.$750 million in notes due 2015, U.S.$2.0 billion in notes due 2010 and U.S.$1.25 billion in notes due 2040. In April 2010, we issued Swiss franc-denominated notes in the domestic Swiss market, consisting of CHF230 million in notes due 2015.

We also have sufficient other sources of funds to meet our other funding requirements. These include cash generated from our operations during 2010, committed facilities from export credit agencies totaling approximately U.S.$1 billion and a bank revolving facility of U.S.$2 billion that matures in April 2011.

 

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REGULATORY MATTERS

As described under “The Offers—Conditions to the U.S. Offer”, we will not be obligated to purchase or exchange any tendered TII Securities pursuant to the U.S. Offer if we have 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 TII Offer and the other transactions contemplated by us 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 TII Offer, in either case unacceptable to us, in our reasonable judgment.

Mexican Regulatory Matters

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

U.S. Regulatory Matters

The TII 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 CGT 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 TII 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 TII Offer. At any time before or after delivery of our shares in the TII 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 our shares pursuant to the TII Offer, seeking the divestiture of TII Shares acquired by us pursuant to the TII Offer or seeking the divestiture of substantial assets of CGT or Telmex Internacional. 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 us relating to the businesses in which we, CGT, Telmex Internacional and our respective subsidiaries are engaged, we believe that the TII Offer will not violate U.S. antitrust laws. Nevertheless, there can be no assurance that a challenge to the TII Offer on antitrust grounds will not be made or, if a challenge were made, what the result would be.

In addition, CGT’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 TII Offer and the CGT 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 TII Offer or the CGT Offer, and there can be no assurance as to the outcome of any such opposition or review.

Other Regulatory Matters

Several of our 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 TII Offer and the CGT Offer.

 

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Except as set forth above, we are unaware of any other material regulatory approvals or other regulatory actions required for the consummation of the TII Offer and the CGT Offer and the other transactions contemplated by us. Should any such approval or other action be required, we currently contemplate that such approval or other action will be sought. We are unable to predict whether such approval or other action may determine that we are required to delay the acceptance for exchange or purchase of TII Securities tendered pursuant to the U.S. 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 Telmex Internacional’s business or certain parts of Telmex Internacional’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 Securities is subject to the conditions as described above under the caption “The Offers—Certain Conditions to the U.S. Offer.”

 

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MATERIAL RELATIONSHIPS AMONG AMÉRICA MÓVIL,

TELMEX INTERNACIONAL AND OUR EXECUTIVE OFFICERS,

DIRECTORS AND MAJOR SHAREHOLDERS

América Móvil’s Major Shareholders

According to reports of beneficial ownership of our shares filed with the SEC on March 1, 2010, the Slim Family may be deemed to control us 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 our shares as of April 30, 2010. Except as described in the table below and the accompanying notes, we are not aware of any holder of more than 5% of any series of our 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 our bylaws. See “Bylaws—Share Capital” under Item 10 of the América Móvil 2009 Form 20-F.

 

     AA Shares(1)    A Shares(2)    L Shares(3)    Combined A
Shares and
AA Shares(*)

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    —      —      —      —      44.8

AT&T Inc.(5)

   2,869    24.5    —      —      —      —      23.6

Inmobiliaria Carso(6)

   696    5.9    —      —      —      —      5.7

 

(*) The AMX AA Shares and AMX A Shares are entitled to elect together a majority of our 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 April 30, 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 April 30, 2010, there were 445 million AMX A Shares outstanding, representing 3.7% of the total full voting shares (AMX A Shares and AMX AA Shares).
(3) As of April 30, 2010, there were 19,952 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 12.37%, 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 our shares. According to reports of beneficial ownership of shares filed with the SEC on March 1, 2010, the Slim Family may be deemed to control us 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 April 30, 2010. In accordance with Mexican law and our bylaws, AT&T holds its AMX AA Shares through a Mexican trust. See “Bylaws—Limitations on Share Ownership” under Item 10 of the América Móvil 2009 Form 20-F. 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 us 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 (or 3.7%) of AMX AA Shares and 264 million (or 1.3%) of AMX L Shares

 

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directly, and his son and chairman of our Board of Directors, Patrick Slim Domit, is the beneficial owner of 444 million (or 3.8%) AMX AA Shares and 516 million (or 2.6%) 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 us 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 our shares prepared by our directors and members of senior management and provided to us, none of our directors or executive officers is the beneficial owner of more than 1% of any class of our capital stock. Directors and members of senior management are requested to provide ownership information of shares of América Móvil or other securities or rights in our shares on a yearly basis.

Telmex Internacional’s Major Shareholders

As of March 5, 2010, the TII AA Shares represented 45.1% of the total capital stock and 95.4% of the combined TII AA Shares and TII A Shares, which together are entitled to elect a majority of Telmex Internacional’s directors. The TII AA Shares are owned by (a) CGT, (b) AT&T International and (c) various other Mexican investors. According to reports of beneficial ownership of TII Shares filed with the SEC on January 27, 2010, CGT made be deemed to control Telmex Internacional.

The following table identifies owners of more than five percent of any class of TII Shares, based on shares outstanding as of March 5, 2010. Except as described below, we are not aware of any holder of more than five percent of any class of TII 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   92.1    23.4   4,846.0    50.0   71.6

AT&T International(4)

   1,799    22.2      —      —        —      —        21.1   

 

(*) The TII AA Shares and TII A Shares are entitled to elect together a majority of Telmex Internacional’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 March 5, 2010, there were 8,115 million TII AA Shares outstanding, representing 95.4% of the combined TII A Shares and TII AA Shares.
(2) As of March 5, 2010, there were 394 million TII A Shares outstanding, representing 4.6% of the combined TII A Shares and TII AA Shares.
(3) As of March 5, 2010, there were 9,504 million TII L Shares outstanding.
(4) Holders of TII A Shares and TII AA Shares are entitled to convert a portion of these Shares to TII L Shares, subject to the restrictions set forth in our bylaws.
(5) Derived from reports of beneficial ownership of our shares filed with the SEC.

The following table sets forth the share ownership, as of March 5, 2010, of Telmex Internacional’s officers and directors who own more than one percent of any class of our capital stock. Carlos Slim Domit (chairman of the board of directors) may be deemed to have beneficial ownership of 6,000 million TII AA Shares, 92.8 million TII A Shares, and 5,038.2 million TII L Shares held by CGT 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)

   6,000.0    73.9   92.8    23.6   5,038.2    53.0   71.6

 

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(1) Holders of TII AA Shares and TII A Shares are entitled to convert a portion of these Shares to TII L Shares, subject to the restrictions set forth in our bylaws. See “Item 10. Additional Information—Bylaws and Mexican Law” under the Telmex Internacional 2009 Form 20-F, incorporated by reference herein. Based on reports of beneficial ownership filed with the SEC, 4,512,225,770 TII AA Shares and all TII A Shares, of which Carlos Slim Domit may be deemed to share beneficial ownership, could be converted to TII L Shares.
(2) TII AA Shares and TII A Shares.
(3) Includes 9,516,264 TII L Shares owned directly by Carlos Slim Domit.

According to the ownership reports of shares or other securities or rights in TII Securities prepared by our directors and members of senior management and provided to us, none of our directors or executive officers entered into any transactions in TII Securities during the past 60 days.

Management Services

Each of Telmex and Telmex Internacional has a management services agreement with CGT for calendar year 2010, under which CGT provides management, consulting and other similar services. Each agreement provides for CGT to receive an annual fee of U.S.$22.5 million. América Móvil does not currently have such an agreement with CGT, although it did through 2006.

América Móvil has an agreement with a subsidiary of AT&T under which that subsidiary provides consulting services and the parties negotiate compensation annually. América Móvil 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 Telmex Internacional were each parties to similar agreements with subsidiaries of AT&T through 2009. The respective AT&T subsidiaries have continued to provide services to Telmex and Telmex Internacional during 2010, and the parties expect to enter into amendments or extensions to the respective agreements in the near future.

We expect to review the arrangements for management services among these companies following the completion of the TII Offer and the CGT Offer.

Shareholder Agreements

América Móvil

Our former controlling shareholder, Amtel, and a subsidiary of AT&T, as successors of CGT 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 us. The AMX L Shares that AT&T will acquire in the TII Offer will not be subject to the agreement.

According to reports of beneficial ownership of our shares filed with the SEC, the Slim Family and 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.

Telmex

A subsidiary of AT&T and CGT 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.

 

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Telmex Internacional

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

Related Party Transactions—Transactions with Telmex, Telmex Internacional and Subsidiaries

We have, and expect to continue to have, a variety of contractual relationships with Telmex, Telmex Internacional and their subsidiaries, including some of their international subsidiaries.

According to beneficial ownership reports filed with the SEC, Telmex and Telmex Internacional may be deemed to be under common control with us.

Continuing Commercial Relationships

Because both we, on the one hand, and Telmex or Telmex Internacional, on the other hand, provide telecommunications services in some of the same geographical markets, we have extensive operational relationships. These relationships include interconnection between our respective networks; use of facilities; use of their private circuits; the provision of long distance services to our customers; and use of each other’s services. The most significant of these relationships are between our Brazilian subsidiaries and Embratel Participações S.A. (“Embratel”), a subsidiary of Telmex Internacional 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 our financial performance. In 2009, Ps. 18,070 million of our 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. We had Ps. 274,481 million in accounts receivable from Telmex and certain of its subsidiaries. We had Ps. 25,628 million in accounts receivable from Telmex Internacional and certain of its subsidiaries, and accounts payable of Ps. 615,804 million to Telmex Internacional and certain of its subsidiaries at December 31, 2009. Also in 2009, Ps. 7,218 million of our 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, our 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. We 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.

Other Commercial Relationships

In 2005, Telmex Argentina, S.A., a subsidiary of Telmex Internacional, 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 on the exchange rate on December 31, 2009).

 

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In 2005, our subsidiary, Claro Chile, S.A. and Telmex Chile Holding, S.A. (“Telmex Chile”), a subsidiary of Telmex International, 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 on the exchange rate on 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 on the exchange rate on 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 our 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, based on the exchange rate on December 31, 2009), depending on the capacity provided under the agreement.

In 2006, Telmex Perú S.A., a subsidiary of Telmex International, 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 on the exchange rate on 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.$39.0 million, based on the exchange rate on December 31, 2009). Once the work is finalized, we expect that AMX Argentina will enter into a 30-year license for use agreement with Telmex Argentina, a subsidiary of Telmex Internacional. Additionally, Telmex Internacional transferred to us the rights to use for 15 years the fiber optic ring serving the Buenos Aires metropolitan area (commonly known in Argentina as the AMBA), which covers most of the urban links of the greater Buenos Aires area (commonly known in Argentina as Gran Buenos Aires) with an approximate value of Ps. 8.1 million (US$ 0.6 million, based on the exchange rate on 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, we make investments together with affiliated companies and sell or buy investments to or from affiliated companies. We have pursued joint investments in the telecommunications industry with Telmex.

Transactions Between Telmex and Telmex Internacional

In 2009, Telmex Internacional, 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 Telmex Internacional has access to Telmex’s customer database for agreed fees.

 

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

The following Unaudited Pro Forma Condensed Combined Financial Statements give pro forma effect to the CGT Offer (a common control transaction) and the TII Offer (a purchase of non-controlling interest) as described below.

On January 13, 2010, América Móvil announced that it intended to conduct two separate but concurrent offers to acquire outstanding shares of Telmex Internacional and CGT. Telmex Internacional provides a wide range of telecommunications services in Brazil, Colombia and other countries in Latin America. CGT is a holding company with controlling interests in Telmex Internacional and Telmex, a leading Mexican telecommunications provider.

The two offers consist of the following:

 

   

The CGT Offer. The consideration in the CGT Offer will consist of 2.0474 AMX L Shares for each share of CGT. If all shareholders of CGT participate in the CGT Offer, América Móvil will issue 7,129 million AMX L Shares in the CGT Offer.

 

   

The TII Offer. The consideration in the TII Offer will consist of 0.373 AMX L Shares or Ps. 11.66, at the election of the exchanging holder, for each share of Telmex Internacional. CGT has announced publicly that it will not participate in the TII Offer. If all shareholders of Telmex Internacional other than CGT participate in the TII Offer and elect to receive shares, América Móvil will issue 2,639 million AMX L Shares in the TII Offer. If all shareholders of Telmex Internacional other than CGT participate in the offer and elect to receive the cash consideration, América Móvil will pay Ps. 82,495 million (US$6,360 million based on the May 21, 2010 exchange rate) in the TII Offer.

This condensed financial information was prepared from, and should be read in conjunction with, the following:

 

   

The audited consolidated financial statements of América Móvil as of and for the year ended December 31, 2009, and for each of the three years in the period ended December 31, 2009.

 

   

The audited consolidated financial statements of Telmex Internacional as of and for the year ended December 31, 2009, and for each of the three years in the period ended December 31, 2009.

 

   

The audited consolidated financial statements of Telmex as of and for the year ended December 31, 2009, and for each of the three years in the period ended December 31, 2009.

The Unaudited Pro Forma Condensed Combined Balance Sheet combines the December 31, 2009 historical consolidated balance sheets of the entities giving effect to the CGT Offer as a merger between entities under common control, as discussed below. It gives effect to the TII Offer as a purchase of non-controlling interest (a shareholders’ equity transaction). The Unaudited Pro Forma Condensed Combined Balance Sheet assumes that the TII Offer and the CGT Offer were completed on December 31, 2009.

The Unaudited Pro Forma Condensed Combined Statements of Income give effect to the CGT Offer as if it had occurred on January 1, 2007. They also give effect to the TII Offer as if it had occurred on January 1, 2009.

The Unaudited Pro Forma Condensed Combined Financial Statements are presented based on historical Mexican FRS amounts, with pro-forma combined net income and pro-forma combined equity amounts reconciled to US GAAP. They do not include any adjustments related to América Móvil’s adoption of IFRS which is to occur in 2010.

The Unaudited Pro Forma Condensed Combined Financial Statements are based on information presently available, using assumptions that we believe are reasonable. The Unaudited Pro Forma Condensed Combined Financial Statements are being provided for information purposes only. They do not purport to represent our actual financial position or results of operations had the TII Offer and the CGT Offer occurred on the dates specified, nor do they project our results of operations or financial position for any future period or date.

 

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The Unaudited Pro Forma Condensed Combined Statements of Income do not reflect any adjustments for operating synergies, transaction expenses or costs that may result from the TII Offer and the CGT Offer. In addition, pro forma adjustments are based on certain assumptions and other information that are subject to change as additional information becomes available. Accordingly, the amounts included in our financial statements published after the completion of the TII Offer and the CGT Offer may vary from the pro-forma amounts included herein.

 

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AMÉRICA MÓVIL, S.A.B. de C.V. AND SUBSIDIARIES

UNAUDITED PRO-FORMA CONDENSED COMBINED BALANCE SHEET

As of December 31, 2009

(in thousands of Mexican pesos)

 

    América
Móvil
Consolidated
  CGT
(non-consolidated)
  Telmex
Consolidated
  Telmex
Internacional
Consolidated
  Pro-Forma
Elimination
Entries

(Note 3 (a))
    Subtotal   Other
Pro-Forma
Adjustments
  Explanation   Pro-Forma
Combined

Current assets:

                 

Cash and cash equivalents

  Ps. 27,445,880   Ps. 6,474,042   Ps. 14,379,768   Ps. 10,699,224   Ps. —       Ps. 58,998,914   Ps. —       Ps. 58,998,914

Accounts receivable, net

    55,918,984     2,752,053     20,218,788     20,462,805     (5,591,403     93,761,227         93,761,227

Derivative financial instruments

    8,361     1,512,820     11,496,359         13,017,540         13,017,540

Related parties

    468,096       894,535     4,000,119     (2,251,470     3,111,280         3,111,280

Inventories, net

    21,536,018       1,543,648     675,859       23,755,525         23,755,525

Other current assets, net

    2,720,983     22,632     3,303,275     2,346,295       8,393,185         8,393,185
                                                   

Total current assets

    108,098,322     10,761,547     51,836,373     38,184,302     (7,842,873     201,037,671     —         201,037,671

Plant, property and equipment

    227,049,009     1,079,770     105,952,096     84,124,541       418,205,416         418,205,416

Licenses, net

    42,582,531       918,341     12,740,656       56,241,528         56,241,528

Trademarks, net

    3,974,527         1,815,916       5,790,443         5,790,443

Goodwill, net

    45,805,279     8,631,267       14,399,481       68,836,027         68,836,027

Investments in affiliates, net

    974,693     90,751,963     1,775,380     16,766,564     (90,873,316     19,395,284         19,395,284

Deferred taxes

    15,908,795     3,365,040       6,098,449     (551,119     24,821,165         24,821,165

Other assets

    8,614,805       17,873,187     170,828     (372,294     26,286,526         26,286,526
                                                   

Total assets

  Ps. 453,007,961   Ps. 114,589,587   Ps. 178,355,377   Ps. 174,300,737   Ps. (99,639,602   Ps. 820,614,060   Ps. —       Ps. 820,614,060
                                                   

 

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AMÉRICA MÓVIL, S.A.B. de C.V. AND SUBSIDIARIES

UNAUDITED PRO-FORMA CONDENSED COMBINED BALANCE SHEET—(Continued)

As of December 31, 2009

(in thousands of Mexican pesos)

 

    América
Móvil
Consolidated
  CGT
(non-consolidated)
  Telmex
Consolidated
    Telmex
Internacional
Consolidated
  Pro-Forma
Elimination
Entries

(Note 3 (a))
    Subtotal     Other
Pro-Forma
Adjustments
    Explanation   Pro-Forma
Combined

Liabilities and Shareholders’ Equity

                 

Current liabilities:

                 

Short term debt and current portion of long-term debt

  Ps. 9,167,941   Ps. 3,361,740   Ps. 19,768,894      Ps. 12,667,266   Ps. —        Ps. 44,965,841      Ps. —          Ps. 44,965,841

Accounts payable and accrued expenses

    97,086,585     2,960,702     12,602,060        17,488,978     (3,870,616     126,267,709            126,267,709

Taxes payable

    16,716,549     175,458     2,211,626        468,842       19,572,475            19,572,475

Related parties

    1,045,155       1,602,128        3,320,070     (3,972,256     1,995,097            1,995,097

Deferred revenues

    16,240,451       1,104,175        4,494,451       21,839,077            21,839,077
                                                         

Total current liabilities

    140,256,681     6,497,900     37,288,883        38,439,607     (7,842,872     214,640,199        —            214,640,199

Long-term liabilities:

                 

Long-term debt

    101,741,199     26,117,402     83,105,454        21,310,434       232,274,489            232,274,489

Deferred taxes

    22,282,245     3,816,567     15,060,058        7,295,658     (654,645     47,799,883            47,799,883

Deferred credits

        466,696        4,991,473       5,458,169            5,458,169

Employee benefits

    10,822,273       4,113,513        2,778,593     (2,559     17,711,820            17,711,820
                                                         

Total liabilities

    275,102,398     36,431,869     140,034,604        74,815,765     (8,500,076     517,884,560        —            517,884,560
                                                         

Shareholders’ equity

                 

Capital stock

    36,524,423     20,462,452     9,020,300        55,015,542     (77,328,307     43,694,410        106,698,656      Notes 2 (a), 2
(c) and 3 (c)
    150,393,066
                                                           

Retained earnings:

                 

From prior years

    38,952,974     27,436,668     7,907,079        11,215,607     (12,851,974     72,660,354        (69,242,616   Notes 2 (a)
and 3 (c)
    3,417,738

Current year

    76,913,454     17,823,677     20,468,689        9,104,501     (31,392,142     92,918,179            92,918,179
                                                           
    115,866,428     45,260,345     28,375,768        20,320,108     (44,244,116     165,578,533        (69,242,616       96,335,917

Accumulated other comprehensive income

    24,782,273     12,434,921     883,225        20,400,517     (22,553,052     35,947,884            35,947,884
                                                           

Total controlling shareholders’ equity

    177,173,124     78,157,718     38,279,293        95,736,167     (144,125,475     245,220,827        37,456,040      Note 3 (e)     282,676,867

Non-controlling interests

    732,439       41,480        3,748,805     52,985,949        57,508,673        (37,456,040   Note 3 (e)     20,052,633
                                                           

Total shareholders’ equity

    177,905,563     78,157,718     38,320,773        99,484,972     (91,139,526     302,729,500        —            302,729,500
                                                           

Total liabilities and shareholders’ equity

  Ps. 453,007,961   Ps. 114,589,587   Ps. 178,355,377      Ps. 174,300,737   Ps. (99,639,602   Ps. 820,614,060      Ps. —          Ps. 820,614,060
                                                           

US GAAP adjustments (Note 5)

    12,145,910       (30,855,922     12,462,959       (6,247,053     124,037,546      Note 3 (d)     117,790,493
                                                           

Pro-Forma Equity under US GAAP

  Ps. 190,051,473   Ps. 78,157,718   Ps. 7,464,851      Ps. 111,947,931   Ps. (91,139,526   Ps. 296,482,447      Ps. 124,037,546        Ps. 420,519,993
                                                           

See accompanying notes to Unaudited Pro-Forma Condensed Combined Financial Statements.

 

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AMÉRICA MÓVIL, S.A.B. DE C.V. AND SUBSIDIARIES

UNAUDITED PRO-FORMA CONDENSED COMBINED STATEMENT OF INCOME

Year ended December 31, 2009

(in thousands of Mexican pesos)

 

    América
Móvil
Consolidated
    CGT
(non-consolidated)
    Telmex
Consolidated
    Telmex
Internacional
Consolidated
    Pro-Forma
Eliminations

(Note 3 (a))
    Subtotal     Other
Pro-Forma
Adjustments
    Explanations   Pro-Forma
Combined
 

Operating revenues:

                 

Services

                 

Air time

  Ps. 118,949,020      Ps. —       Ps. 45,027,811      Ps. 15,255,365      Ps. —        Ps. 179,232,196      Ps. —          Ps. 179,232,196   

Interconnection

    60,557,856          16,572,941        34,876,488        (25,776,078     86,231,207        —            86,231,207   

Monthly rent

    75,585,846              (6,367     75,579,479        —            75,579,479   

Long-distance

    23,301,403          20,804,790          (138,117     43,968,076        —            43,968,076   

Data

        30,817,715        29,762,188        (241,426     60,338,477        —            60,338,477   

Value added services and other services

    70,743,490        772,138        5,876,955        12,646,045        (2,487,380     87,551,248        —            87,551,248   

Sales of handsets and accessories

    45,573,416              —          45,573,416        —            45,573,416   
                                                                 
    394,711,031        772,138        119,100,212        92,540,086        (28,649,368     578,474,099        —            578,474,099   
                                                                 

Operating costs and expenses:

                 

Cost of sales and services

    165,039,738          45,955,140        48,421,032        (27,027,387     232,388,523        —            232,388,523   

Commercial, administrative and general expenses

    72,380,031        27,611        20,830,245        21,540,979        (1,178,292     113,600,574        —            113,600,574   

Depreciation and amortization

    53,082,307        55,315        17,950,768        11,526,288        (28,489     82,586,189        —            82,586,189   
                                                                 
    290,502,076        82,926        84,736,153        81,488,299        (28,234,168     428,575,286        —            428,575,286   
                                                                 

Operating income

    104,208,955        689,212        34,364,059        11,051,787        (415,200     149,898,813        —            149,898,813   
                                                                 

Other expenses, net

    (2,165,584     42,593        (1,349,680     (47,973     (7,705     (3,528,349     —            (3,528,349
                                                                 

Comprehensive result of financing:

                 

Interest income

    1,691,929        174,931        711,243        1,085,044        —          3,663,147        —            3,663,147   

Interest expense

    (7,410,314     (1,226,951     (6,122,328     (2,365,641     —          (17,125,234     —            (17,125,234

Exchange gain (loss), net

    4,556,571        (538,468     1,096,531        2,372,766        —          7,487,400        —            7,487,400   

Other financing (cost) income, net

    (1,820,110     —          —          —          —          (1,820,110     —            (1,820,110
                                                                 
    (2,981,924     (1,590,488     (4,314,554     1,092,169        —          (7,794,797     —            (7,794,797
                                                                 

Equity interest in net income of affiliates

    195,714        19,098,194        254,680        1,889,386        (19,098,194     2,339,780        —            2,339,780   
                                                                   

Income before taxes on profit

    99,257,161        18,239,511        28,954,505        13,985,369        (19,521,099     140,915,447        —            140,915,447   

Taxes on profit

    22,259,308        415,834        8,485,522        4,422,481        (103,527     35,479,618        —            35,479,618   
                                                                   

Net income—Mexican FRS

    76,997,853        17,823,677        20,468,983        9,562,888        (19,417,572     105,435,829        —            105,435,829   

US GAAP adjustments
(Note 5)

    (2,638,029     Note 3 (d)      (650,473     (976,367       (4,264,869     (3,058,090   Note 3 (d)     (7,322,959
                                                                 

Net income—US GAAP

  Ps. 74,359,824      Ps. 17,823,677      Ps. 19,818,510      Ps. 8,586,521      Ps. (19,417,572     101,170,960        (3,058,090     Ps. 98,112,870   
                                                                 

 

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AMÉRICA MÓVIL, S.A.B. DE C.V. AND SUBSIDIARIES

UNAUDITED PRO-FORMA CONDENSED COMBINED STATEMENT OF INCOME—(Continued)

Year ended December 31, 2009

(in thousands of Mexican pesos)

 

    América
Móvil
Consolidated
  CGT
(non-consolidated)
  Telmex
Consolidated
  Telmex
Internacional
Consolidated
  Pro-Forma
Eliminations

(Note 3 (a))
    Subtotal   Other
Pro-Forma
Adjustments
    Explanations   Pro-Forma
Combined

Distribution of net income under Mexican FRS:

                 

Controlling interest

  Ps. 76,913,454   Ps. 17,823,677   Ps. 20,468,689   Ps. 9,104,501   Ps. (19,417,572   Ps. 104,892,749   (8,304,147   Note 3 (e)   Ps. 96,588,602

Non-controlling interest (Note 3 (e))

    84,399       294     458,387     —          543,080   8,304,147      Note 3 (e)     8,847,227
                                                   
  Ps. 76,997,853   Ps. 17,823,677   Ps. 20,468,983   Ps.  9,562,888   Ps. (19,417,572   Ps. 105,435,829   —          Ps. 105,435,829
                                                   

Distribution of net income under US GAAP:

                 

Controlling interest

  Ps. 74,278,317               Note 3 (d)   Ps. 89,880,120

Non-controlling interest (Note 3 (e))

    81,507               Note 3 (d)     8,232,750
                         
  Ps. 74,359,824                 Ps. 98,112,870
                         

Weighted average number of shares outstanding (in millions)

    32,738               Note 3 (f)     42,506
                         

Controlling Interest earnings per share—Mexican FRS

  Ps. 2.35                 Ps. 2.27
                         

Controlling interest earnings per share—US GAAP

  Ps. 2.27                 Ps. 2.11
                         

See accompanying notes to Unaudited Pro-Forma Condensed Combined Financial Statements.

 

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AMÉRICA MÓVIL, S.A.B. DE C.V. AND SUBSIDIARIES

UNAUDITED PRO-FORMA CONDENSED COMBINED STATEMENT OF INCOME

Year ended December 31, 2008

(in thousands of Mexican pesos)

 

    América
Móvil
Consolidated
    CGT
(non-consolidated)
    Telmex
Consolidated
    Telmex
Internacional
Consolidated
    Pro-Forma
Eliminations
(Note 3 (a))
    Subtotal     Other
Pro-Forma
Adjustments
    Explanations   Pro-Forma
Combined
 

Operating revenues:

                 

Services:

                 

Air time

  Ps. 99,258,566      Ps. —        Ps. 48,982,383      Ps. 10,593,515      Ps. —        Ps. 158,834,464      Ps. —          Ps. 158,834,464   

Interconnection

    60,371,865          19,139,692          (26,308,965     53,202,592        —            53,202,592   

Monthly rent

    66,805,611              —          66,805,611        —            66,805,611   

Long-distance

    20,624,128          24,535,033        31,592,774        (68,969     76,682,966        —            76,682,966   

Data

        25,387,672        22,253,818        (245,999     47,395,491        —            47,395,491   

Value added services and other services

    51,089,479        516,448        6,060,455        11,564,634        (2,173,306     67,057,710        —            67,057,710   

Sales of handsets and accessories

    47,505,259                47,505,259        —            47,505,259   
                                                                   
    345,654,908        516,448        124,105,235        76,004,741        (28,797,239     517,484,093        —            517,484,093   
                                                                   

Operating costs and expenses:

                 

Cost of sales and services

    146,025,037          46,566,053        38,972,801        (27,972,886     203,591,005        —            203,591,005   

Commercial, administrative and general expenses

    62,316,415        11,367        19,863,006        19,141,283        (867,135     100,464,936        —            100,464,936   

Depreciation and amortization

    41,767,309        19,712        17,933,207        8,967,605          68,687,833        —            68,687,833   
                                                                   
    250,108,761        31,079        84,362,266        67,081,689        (28,840,021     372,743,774        —            372,743,774   
                                                                   

Operating income

    95,546,147        485,369        39,742,969        8,923,052        42,782        144,740,319        —            144,740,319   
                                                                   

Other expenses, net

    (2,326,959     2,380        (679,592     (102,434     (16,155     (3,122,760     —            (3,122,760

Comprehensive result of financing:

                 

Interest income

    2,414,390        189,271        913,462        1,265,849        (1,513     4,781,459        —            4,781,459   

Interest expense

    (8,950,562     (2,050,980     (7,652,427     (1,508,463     23        (20,162,409     —            (20,162,409

Exchange gain (loss), net

    (13,686,423     (1,157,041     (2,493,729     (1,878,262     —          (19,215,455     —            (19,215,455

Other financing (cost) income, net

    6,357,722        —          —          —          —          6,357,722        —            6,357,722