Telefonica Stock Sale to Boost Latin Holdings

Spanish telecommunications giant Telefonica plans to issue $20 billion of new stock to take full control of four big Latin American units and expand its conquest of one of the world’s fastest-growing markets. The sale of nearly a billion new shares, announced on Wednesday, represents about a quarter of Telefonica’s market value. The new shares would be offered to shareholders in Telefonica’s operations in Brazil, Argentina and Peru. Telefonica, already one of the world’s 10-largest telecom companies, would seek to buy up to 100% of the four subsidiaries through the all-share transactions. The move appeared designed to give Telefonica the clout it needs to compete more effectively with the world’s telecom giants in the fast-converging Internet, mobile and media sectors and in traditional telephone services. Telefonica also said it is creating two new global business units, one to fuse its extensive mobile interests and the other to group its data and business services. Telefonica’s American depositary receipts closed up $4.25 to close at $77.06 on Friday on the New York Stock Exchange.