The Telmex Deal: How Carlos Slim Built Latin America's Largest Fortune

The acquisition of Telmex — Telefonos de Mexico — in December 1990 was the single most transformative business transaction in Latin American history. It turned Carlos Slim from a wealthy Mexican businessman into one of the richest people on Earth, and it demonstrated a principle that would define his investment philosophy for the next three decades: the greatest fortunes are built by buying essential assets during periods of crisis, when others lack the courage or the capital to act.

In the late 1980s, Mexico was in economic turmoil. The Latin American debt crisis of the 1980s had devastated the economy, inflation was rampant, and President Carlos Salinas de Gortari had embarked on an ambitious privatization program to modernize the economy and attract foreign investment. Telmex, the state-owned telephone monopoly, was the crown jewel of the privatization effort. The company had massive infrastructure but was poorly managed, with long wait times for new phone lines and unreliable service.

Slim assembled a consortium that included Southwestern Bell (now AT&T) and France Telecom to bid for a controlling stake. His group won with a bid of approximately $1.76 billion for a 20.4% economic interest — but crucially, the stake carried majority voting control. Critics argued that Slim had received the company at a bargain price and that the privatization process lacked transparency. Supporters countered that Slim was taking on enormous risk by investing in a troubled company in a troubled economy, and that no other Mexican business group had the capital or the nerve to do the deal.

What happened next validated the optimists. Slim and his team invested heavily in modernizing Telmex's infrastructure, expanding the network, improving service quality, and reducing wait times. Mexico's economy stabilized and then boomed. Telephone penetration, which had been among the lowest in Latin America, surged as the growing middle class demanded connectivity. Telmex's revenue and profits grew rapidly, and the value of Slim's stake multiplied many times over.

But Slim's genius was not merely in buying Telmex — it was in recognizing that the telecommunications revolution was just beginning. In 2000, he spun off Telmex's wireless operations as America Movil and began an aggressive expansion across Latin America, acquiring mobile operators in Brazil, Colombia, Argentina, Ecuador, Guatemala, and more than a dozen other countries. As mobile phone penetration exploded across the developing world — from near zero to near universal in many markets — America Movil's subscriber base and revenue grew at extraordinary rates.

By 2010, Carlos Slim was the richest person in the world, surpassing Bill Gates and Warren Buffett. America Movil had over 200 million subscribers, and Slim's combined telecommunications empire generated tens of billions of dollars in annual revenue. The $1.76 billion Telmex investment had become worth well over $100 billion, representing one of the greatest returns on investment in business history.

The Telmex story illustrates several of Slim's core principles in action. He bought during crisis, when asset prices were depressed and competition for the deal was limited. He focused on an essential service — telecommunications — that would benefit from decades of structural growth in a developing economy. He invested aggressively in improving the asset after acquisition, rather than stripping out costs. And he extended his initial advantage by expanding into adjacent markets, building America Movil into the dominant telecommunications platform across Latin America. For investors studying how great fortunes are built, the Telmex acquisition remains one of the most instructive case studies in history.