Alfa SAB de CV : and Alestra announce a memorandum of understanding to merge Alestra and Axtel

October 1, 2015

San Pedro Garza Garcia, N.L., Mexico, October 1st, 2015.- ALFA, S.A.B. de C.V. ('ALFA') announced today that, together with its wholly-owned subsidiary Alestra, S. de R. L. ('Alestra') have signed a Memorandum of Understanding with Axtel, S.A.B. de C.V. ('Axtel'), a Mexican fixed-line integrated telecommunications company, and a group of Axtel's major shareholders, to merge Alestra and Axtel (the 'Transaction'). Under the agreed terms, Axtel will remain as an operating and publicly-traded holding company and is expected to issue new shares to be held by ALFA representing approximately 51% of the combined entity ownership.

Per this agreement, the Board of Directors of the new Axtel will be integrated by Directors nominated by ALFA and by Axtel's shareholders. Messrs. Alvaro Fernandez Garza and Tomas Milmo Santos will be Co-Chairmen of the Board and strategic decisions will be approved by mutual consent between the two groups. Mr. Milmo will also co-lead, together with a Director elected by ALFA, an Executive Committee that will oversee these strategic decisions and, among others, approve the Post-Merger Integration plan and the initial organizational structure of the combined entity. At closing of the Transaction, Mr. Rolando Zubiran will be appointed as Chief Executive Officer of the combined entity while Mr. Felipe Canales will be the Chief Financial Officer.

'We agreed on the Transaction because we see significant value creation for our customers and shareholders through the merger of two leading organizations', said Alvaro Fernandez Garza, ALFA's President. 'Furthermore, the merger between Alestra and Axtel enhances their competitive advantages and positions the company to continue to meet the growing demands of the Mexican telecomm and IT markets', he remarked.

The new entity will have a more robust network and commercial operation, including 37,500 km of backbone, metropolitan and FTTH fiber optics network; plus 6,000 m2 of data center space and a portfolio of enterprise customers generating $11,000 million pesos in pro-forma annual revenues and $4,000 million pesos in pro-forma revenues from consumer and other segments.

The Transaction is expected to generate EBITDA synergies from economies of scale in expenses, network integration efficiencies and transfer of skills. Additionally, the combined entity will generate financial synergies from an improved capital structure.

The merger of Alestra and Axtel is expected to create an entity with a stronger competitive position and improved capabilities to provide telecommunication and IT services to enterprise customers and FTTH-based triple play offers to the high-end consumer segment.

The Transaction and its most relevant terms and conditions have been approved by both ALFA's and Axtel's Boards of Directors. Closing of the Transaction is subject to the completion of confirmatory legal, financial and operating due diligence, various regulatory and corporate approvals and definitive contractual agreements. The Transaction is expected to close by the end of this year or early next year.

About ALFA
ALFA is a company that manages a portfolio of diversified companies. Among them; Nemak, a leading provider of innovative light-weighting solutions for the automotive industry specializing in the development and manufacturing of aluminum components for powertrain and body structure; Alpek, one of the world's largest producers of polyester (PTA, PET and fibers), which also leads the Mexican market in petrochemicals such as polypropylene, expandable polystyrene and caprolactam; Sigma, an important producer, marketer and distributor of highly recognized branded foods in Mexico, the United States and Europe; Alestra, a leading provider of information technology and telecommunications services for the enterprise segment in Mexico; and, Newpek, a company in the hydrocarbons industry in Mexico and the United States. In 2014, ALFA reported consolidated revenues of Ps. 229,226 million (U.S. $17.2 billion), and EBITDA of Ps. 27,116 million (U.S. $2 billion. ALFA's shares are quoted on the Mexican Stock Exchange and on Latibex, the market for Latin American shares of the Madrid Stock Exchange.

About Alestra
Alestra offers the most innovative Information Technology solutions, supported by a practice of Network Managed Services to multinational, small and large companies, as well as institutional clients. Alestra provides: value added services like Data Center, Cloud and Security applications; vertical solutions; in addition to consulting services for designing and managing complex TIC projects. Its leadership is inspired by a constant innovation philosophy and supported by certifications, additionally boosted by alliances with leading technology suppliers.

Forward-Looking Statements
This release contains certain forward-looking statements regarding the future events or the future financial performance of ALFA, Alestra and Axtel. These statements reflect management's current views with respect to future events or financial performance, and are based on management's current assumptions and information currently available and are not guarantees of future performance. The timing of certain events and their actual results could differ materially from those projected or contemplated by the forward-looking statements due to a number of factors including, but not limited to those inherent to operating in a highly regulated industry, strong competition, commercial and financial execution, economic conditions, among others.

Contact:

Enrique Flores
Vice President, Corporate Communications
ALFA, S.A.B. de C.V.
Phone + 52 (81) 8748-1207
eflores@alfa.com.mx