Mexico's America Movil and Austrian state holding company ÖIAG signed a shareholder pact Wednesday that gives them joint control over Telekom Austria.
After 12 hours of deliberations and a long wait due to lack of a quorum, ÖIAG's supervisory board gave the green light here Wednesday for an agreement with the telecommunications giant controlled by Mexican multi-billionaire Carlos Slim.
The accord was then signed by two representatives from ÖIAG and two from America Movil's wholly owned subsidiary Carso Telecom, Austrian news agency APA reported.
The shareholder pact, which requires the two companies to vote in unison on key company issues, creates a controlling syndicate with a combined 55.2 percent stake in TA.
Because the alliance's stake is higher than 30 percent, it is required under Austrian law to make a joint takeover offer for the company's remaining shares.
The agreement was in doubt until the last minute due to the resistance of union representatives on ÖIAG's board, who said the pact with America Movil did not provide sufficient guarantees for future investments and the company's permanence in Austria.
The Austrian government, for its part, defends the pact with Slim - one of the world's wealthiest individuals - as the only way to guarantee the future of the former state monopoly.
The Austrian government holds a 28.4 percent stake in TA via ÖIAG and has veto rights over strategic decisions, while America Movil has a 26.8 percent interest.
The two partners must make a joint takeover offer for TA's remaining 45 percent stake following Wednesday's agreement, meaning the Austrian government must come up with a significant capital injection to prevent Slim from taking full control of the telecom.
TA, whose main markets are Austria, Serbia, Bulgaria, Croatia and Belarus, has roughly 23 million fixed-line and wireless subscribers in eight countries of central, eastern and southeastern Europe.
The group posted nearly 4.2 billion euros (around $5.8 billion) in revenue in 2013 and had 16,000 employees at the end of last year.
Telekom Austria became key to Slim's expansion strategy in Europe after he was stymied last year in his bid to take control of Dutch telecom operator KPN.
America Movil said in a news release Wednesday that it and ÖIAG agreed as part of the transaction to support a capital increase in TA of 1 billion euros ($1.4 billion).
The Mexico City-based company said in the same release that it would offer 7.15 euros ($9.88) per share for the remainder of TA's stock still in circulation. EFE