Mexico: Televisa seeks Megacable purchase, dominating cable TV market

Mexican television giant Grupo Televisa has announced its plans to acquire the Megacable Group. If implemented, the operation would give Televisa sway over almost 80% of the restricted television market and the so-called Triple Play (Internet, telephone, and cable television) sector.

Important investors have commented that Grupo Bours (owners of Megacable) could obtain authorization from the National Banking and Securities Commission (CNBV) to sell the company, at an estimated value of between US$3.8 billion and US$4 billion.

“The consolidation of the telecommunications sector is somewhat likely, especially in a more competitive environment, since companies would seek to generate synergies and economies of scale to maintain profitability,” said Manuel Jiménez, director of Banorte Banking Analysis.

The merger between Megacable and Grupo Televisa would turn this company into a true triple play monopoly, since “it is the same company that transversally controls the entire content market in restricted television,” said analyst Jorge Negrete.

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