Carlos Slim

carlos slim

Carlos Slim (b. 1940) is a Mexican businessman, and the richest person in the world, worth more than US$60 billion. He owns the Mexican phone company Telmex, which provides a telephone service to most Mexicans. After graduating, Slim expanded on his father’s ownings of real estate in Mexico City. By age 26, he was worth $40 million. During the 1980s and 1990s, Slim bought several companies that were bankrupt or being privatized. Slim owns about 7% of the New York Times.

The Mexican magnate’s growing fortune has caused a controversy because it has been amassed in a developing country where per capita income does not surpass $14,500 a year, and nearly 17% of the population lives in poverty. Critics claim that Slim is a monopolist, pointing to Telmex’s control of 90% of the Mexican landline telephone market. Slim’s wealth is the equivalent of roughly 5% of Mexico’s annual economic output. Telmex, of which 49.1% is owned by Slim and his family, charges among the highest usage fees in the world, according to the Organisation for Economic Co-operation and Development.

Slim was born in Mexico City in 1940 to Maronite Christian parents of Lebanese descent. His father, born Khalil Slim Haddad, immigrated to Mexico at the age of 14 in 1902 and changed his first name to Julián. As it was not uncommon for Lebanese children to be sent abroad before they reached the age of 15 to avoid being conscripted into the Ottoman army, four of Haddad’s older brothers were already living in Mexico at the time of his arrival. Carlos Slim’s mother, Linda Helú, was born in Chihuahua, of Lebanese parents who had immigrated to Mexico in the late 19th century. Her parents upon immigrating to Mexico had founded one of the first Arabic language magazines for the Lebanese-Mexican community, using a printing press they had brought with them.

In 1911, Julián established a dry goods store, La Estrella del Oriente (The Star of the Orient). By 1921, he had purchased real estate in the flourishing commercial district of Mexico City. These enterprises became the source of considerable wealth. In August 1926, Julián Slim and Linda Helú married. They had six children: Nour, Alma, Julián, José, Carlos and Linda. Julián senior, who had been influential in the Lebanese-Mexican business community, died in 1953.

Slim and his siblings were taught basic business practices by their father, and at the age of 12 Slim bought shares in a Mexican bank. He went on to study engineering at the National Autonomous University of Mexico, while simultaneously teaching algebra and linear programming there. In 1965 he incorporated Inversora Bursátil and then bought Jarritos del Sur. In 1966, already worth US$40 million, he founded Inmobiliaria Carso. Three months later he married Soumaya Domit Gemayel (the Carso name derives from the first three letters of Carlo and the first two of Soumaya) and they remained married until her death in 1999.

Construction, real estate and mining businesses were the focus of his early career. By 1972 he had established or acquired a further seven businesses in these categories, including one which rented construction equipment. In 1976 he branched out by buying a 60% interest in a printing business and in 1980 he consolidated his business interests by forming Grupo Galas as the parent company of a conglomerate that had interests in industry, construction, mining, retail, food and tobacco.

In 1982 the Mexican economy, which had substantially relied on oil exports, contracted rapidly as the price of oil fell and interest rates rose worldwide. Banks and other businesses were nationalized, crippled or collapsed and the peso was devalued. At this time, and during the period of recovery to 1985, Slim invested heavily. He bought outright, or a large percentage of, numerous Mexican businesses, including Reynolds Aluminio, General Popo (General Tire’s trading name in Mexico), Bimex hotels and Sanborns, a food retailer. He also acquired a 40% interest in the Mexican arms of British American Tobacco and 50% of that of Hershey’s. He moved into financial services as well, buying Seguros de México and creating from it, along with other purchases such as Fianzas La Guardiana and Casa de Bolsa Inbursa, the Grupo Financiero Inbursa. Many of these acquisitions were financed by the cash flows from Cigitam, a tobacco business which he bought early in the economic downturn.

He added the Nacrobre group of companies – which trade in copper and aluminium products – in 1986, along with a chemicals business, Química Fluor, and others. In 1990 the Grupo Carso was floated as a public company, with share placements initially in Mexico and then worldwide.

Later in 1990 he acted in concert with France Télécom and Southwestern Bell Corporation in order to buy landline telephony company Telmex from the Mexican government. By 2006, 90 percent of the telephone lines in Mexico are operated by Telmex, whilst his mobile telephony company, Telcel, operates almost eighty percent of all the country’s cellphones. Telcel was created out of the Radiomóvil Dipsa company.

In 1991 he acquired Hoteles Calinda (today, OSTAR Grupo Hotelero) and in 1993 increased his stakes in General Tire and Grupo Aluminio to the point where he had a majority interest. In 1996 Grupo Carso was split into three companies – Carso Global Telecom, Grupo Carso, and Invercorporación – and the following year Slim bought the Mexican arm of Sears Roebuck.

1999 saw Slim expanding his business interests beyond Latin America. He set up Telmex USA and also acquired a stake in Tracfone, a US cellular telephone company. At the same time he established Carso Infraestructura y Construcción, S. A. (CICSA) as a part of the Grupo Carso, this being a construction and engineering company. It was also at this time that he had heart surgery and subsequently passed on much of the day-to-day involvement in the businesses to his children and their spouses.

América Telecom, the holding company for América Móvil was incorporated in 2000. It took stakes in various cellular telephone companies outside Mexico, including the Brazilian ATL and Telecom Americas concerns, Techtel in Argentina, and others in Guatemala and Ecuador. In subsequent years there was further investment in this sphere, including deals involving companies in Colombia, Nicaragua, Peru, Chile, Honduras and El Salvador. 2000 also saw a venture with Microsoft which led to the start of the Spanish T1msn portal, later renamed ProdigyMSN.

In 2005, he formed Impulsora del Desarrollo y el Empleo en America Latina SAB de CV (IDEAL – roughly translated as ‘Promoter of Development and Employment in Latin America’), a Mexico-based company primarily engaged in not-for-profit infrastructure development. He also invested in the Volaris airline that year.

Having amassed a 50.1% stake in Cigatam, the tobacco company, Slim reduced his holdings by selling a large part of that to Philip Morris in 2007 for $1.1bn, while in the same year also selling his entire interest in a tile company, Porcelanite, for $800m. He also licensed the Saks name and opened Saks Fifth Avenue in Santa Fé, Mexico. The following year saw him take a 6.4% stake in The New York Times Company.

In 1995 he established Fundación Telmex, a broad-ranging philanthropic foundation. This followed the creation of his eponymous non-profit philanthropic foundation, Fundación Carlos Slim Helú in 1986. In 2007 it was announced that the latter body had an asset base of $4 billion and that it would be establishing Carso Institutes for Health, Sports and Education. Furthermore, it was to work in support of an initiative of Bill Clinton to aid the people of Latin America.

Among the activities of Fundación Telmex has been the organization of Copa Telmex, an amateur sports tournament which in 2007 was recognized by Guinness World Records as having the most participants of any such tournament in the world, a record which it extended in 2008. Together with Fundación Carlos Slim Helú, this organisation announced in the same year that it was to invest more than $250 million in Mexican sports programs, from grass-roots level to Olympic standard.

The Fundación Carlos Slim Helú sponsors the Museo Soumaya in Mexico City which has the most extensive Rodin and Dalí collection in Latin America and one of the largest in the world, as well as religious artworks from colonial times.

In 2000, Slim, along with ex-broadcaster Jacobo Zabludowsky organized the Fundación del Centro Histórico de la Ciudad de México A.C. (Mexico City Historic Downtown Foundation), with the objective to revitalizing and rescuing Mexico City’s historic downtown area to enable more people to live, work and find entertainment there. He has been Chairman of the Executive Committee for the Restoration of the Historic Jeripollas since 2001.

Slim was on the Board of Directors of the Altria Group (previously known as Philip Morris) until his resignation in April 2006. Slim was also on the Board of Directors of Alcatel. Slim currently sits on the Board of Directors for Philip Morris International. He was on the Board of Directors of SBC Communications until July 2004, when he quit to devote more time to the World Education & Development Fund, which is focused on infrastructure, health and education projects. In 1997, just before the company introduced its iMac line, Slim bought 3% of Apple Inc.’s stock.

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