| | |  Business News | January 2009 
Bargains Lure Mexico's Slim Back Into Action
 Noel Randewich & Tomas Sarmiento - Reuters
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| | Mexican businessman Carlos Slim gestures during the "Tendiendo puentes" (Building bridges) summit in Punta del Este November 25, 2008. (Reuters/Andres Stapff) | |
Mexico City - Carlos Slim has become one of the world's richest men by buying companies that are struggling for survival. Now, some think the semi-retired tycoon may cement his position by taking advantage of the current economic turmoil.
His latest forays into several troubled U.S. companies such as The New York Times and retailer Saks Inc are vintage Slim.
"He wants to cement his legacy. He's one of the few guys out there with money and I'm pretty sure he'll come out of the financial crisis being the world's richest man," said Edgar Amador, an independent financial analyst in Mexico City.
The 68-year-old Slim, known for his passion for soccer and cigars, in recent years has focused on charity work, and has put his sons and other family members in charge of running his companies day-to-day in Mexico.
Last year, Slim's fortune was worth $60 billion, behind U.S. financier Warren Buffett and ahead of Microsoft founder Bill Gates, according to Forbes magazine.
Slim's $250 million investment in The New York Times Co, announced this week, as well as the recent purchase of a stake in distressed Citigroup, suggest that the former stock trader has been unable to resist bargains created by the market meltdown.
Also, Slim revealed in November he had taken an 18 percent stake in Saks Inc, prompting the luxury retailer's board to take steps to head off a takeover.
Shares of Saks have buckled in the past several months as the credit crunch and slumping U.S. economy force even well-heeled shoppers to cut spending.
The son of a Lebanese immigrant who made a small fortune by acquiring property during the 1910-1917 Mexican Revolution, Slim's trademark in Mexico is his "Midas" business touch, buying struggling companies on the cheap and turning them into profitable cash cows.
"In moments of crisis he's always been a winner," said Jorge Alvarez Hoth, a telecommunications expert and former government official who has worked with Slim.
TELECOM EMPIRE
Slim wields immense political and economic power in Mexico, where he built a telecommunications empire on America Movil, the largest cell phone operator in Latin America, and Telmex, Mexico's dominant fixed-line phone company.
Over the years, Slim has held investments in the media, including leading Mexican television network Televisa, but journalists say he has taken a stand-back approach.
"When he has invested in the media, he has invested financially. He hasn't tried to control the media," veteran political commentator and Reforma newspaper columnist Sergio Sarmiento told Reuters.
In the past few years, Slim has devoted part of his fortune to charities including medical treatments and sports centers for Mexicans in poor areas. He has also made donations to former U.S. President Bill Clinton's charitable foundation.
While known as a philanthropist, he has also fought charges of monopolistic practices that his detractors say were essentially sanctioned by the Mexican government.
His control in Mexico of restaurants, retail stores, a bank, construction companies and an industrial conglomerate lead critics to say it is hard to go a day without spending a peso at one of Slim's businesses.
The investment in the Times Co by Slim would make him one of the largest shareholders in the venerable newspaper publisher, following the Ochs-Sulzberger family, which has controlled the company for more than 100 years.
The New York Times Co, which owns the namesake newspaper as well as The Boston Globe and other local U.S. papers, is struggling to pay off more than $1.1 billion in debt in the next few years, even as advertising revenue deteriorates.
The publisher's shares have slumped 60 percent over the past 12 months.
Amid the global credit debacle in November, Slim's Inbursa bank acquired a $150 million stake in Citigroup as Wall Street investors dumped the stock, sending it to a 16-year low.
He is mentioned as a likely buyer of Citigroup's Mexican bank, Banamex, which analysts say the troubled U.S. financial group may sell. Slim's spokesman says the tycoon is not in talks to buy Banamex.
Slim has not revealed his intention with the Times but last year told Reuters a 7 percent investment he had already made in the publisher was "financial" rather than strategic.
"He's taking advantage of bargains," said Alejandro Villagomez, a professor at Mexico's Center for Investigation and Economic Research. "When the market comes back he's going to unwind a lot of these purchases and take profits."
(Additional reporting by Robert MacMillan in New York, editing by Matthew Lewis) |
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