Analyst Note| Michael Hodel, CFA |
America Movil agreed to sell its operations in Panama to Cable & Wireless Panama, an entity jointly owned by Liberty Latin America and the Panamanian government, for $200 million. While the deal isn’t significant relative to Movil overall, it represents the firm’s latest move to simplify its business and divest assets that aren’t well positioned competitively. Movil’s Panamanian business is tiny, consisting of only 760,000 wireless customers (about 13% market share) and generating only $157 million of revenue in 2020 (about 7% of its Central American segment, which contributes about 5% of consolidated revenue). Movil will retain its wireless towers in the country, contributing these to its planned tower spinoff. Our $18 fair value estimate for Movil is unchanged, and we believe the shares are roughly fairly valued.