Report: AT&T Eyes European Expansion to Offset Slow Growth in the U.S.
January 17, 2013 9:30 AM
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Analysts are dubious of the AT&T purchase rumors
Reports have surfaced that AT&T is looking to make an acquisition in Europe. AT&T could possibly be considering the purchase of Dutch carrier KPN or UK carrier Everything Everywhere in an effort to offset slowing growth within the U.S. Word of a potential AT&T buyout of Dutch provider KPN sent shares in the Dutch wireless carrier up 3.8% to close at €4.40, a five-week high.
AT&T and KPN have made no official comment on rumors of a potential purchase.
Analyst Jos Versteeg from private Dutch bank Theodoor Gilissen says that companies like AT&T could benefit from buying European rivals to create economies of scale. The analyst says that this move would be similar to the international expansion of British carrier Vodafone. However, a large portion of KPN is owned by a Mexican billionaire named Carlos Slim.
"Slim owns almost 30 percent. I don't see him selling now. He is a long-term investor. AT&T doesn't stand a chance buying KPN," Versteeg said."
Another analyst, Robin Bienenstock from Bernstein, noted that AT&T and Carlos Slim's company America Movili had attempted to work together in a bid for Telecom Italia in the past. She notes that she sees little chance of AT&T making a takeover in Europe.
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Might be a good move
1/17/2013 12:25:01 PM
This might be a good move for AT&T. European telecom stock prices are beaten down now and probably a good value. Also, the EU is cooking up some kind of policy change that will allow all the EU telcos to pool money for infrastructure investment. AT has a long history of working within a regulatory framework in the US and could probably navigate those waters in Europe as well as anybody. They're probably running all kinds of analyses to see how they can cash in on the upcoming EU policy changes before the market figures it out.
"You can bet that Sony built a long-term business plan about being successful in Japan and that business plan is crumbling." -- Peter Moore, 24 hours before his Microsoft resignation
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