(Adds combined market share)
MEXICO CITY, Oct 1 (Reuters) - Mexican telecommunications firms Alestra, a unit of industrial conglomerate Alfa, and Axtel announced on Thursday they would merge to better rival Carlos Slim’s America Movil, which dominates Mexico’s fixed-line market.
Alfa will own 51 percent of the new company once new shares are issued, while Axtel will remain traded on Mexico’s stock exchange, the two firms said in a joint statement. The statement did not include financial terms for the deal.
Together, the firms will have a fixed-line market share of less than 6 percent, according to regulator statistics.
The merger follows sweeping reforms to Mexico’s telecommunications and broadcasting industries last year to spur greater competition in the market and curb the power of Slim, a billionaire whose America Movil has some 70 percent of Mexico’s mobile market and over 60 percent of fixed lines.
Alfa’s Chairman Alvaro Fernandez Garza and Axtel’s Chairman Tomas Milmo Santos will be co-presidents of the new combined firm and will make decisions by mutual agreement. Alestra chairman and CEO Rolando Zubiran Shetler will be named chief executive of the combined entity once the transaction is completed.
The merger, which is still subject to regulatory approval, is expected to close at the end of this year or the beginning of 2016. (Reporting by Anna Yukhananov and Tomas Sarmiento, additional reporting by Christine Murray; Editing by Christian Plumb and Diane Craft)