Mexican telco América Móvil (AMX) and Chilean company Entel are looking to acquire Telefónica's assets in Chile.

The companies have signed a non-binding agreement to jointly explore a possible bid for the assets of Telefónica Chile (Movistar Chile).

The companies will evaluate whether to present a joint or individual offer, subject to internal corporate approvals and to the regulations and authorizations required by Chilean regulations, including the Chilean National Economic Prosecutor's Office (FNE).

No final decisions have been made regarding the presentation of a binding offer.

"An extensive analysis of Telefónica's information is still required to value the assets, understand the risks of the business, and negotiate the participation structure of each party," the companies said.

Local press suggests América Móvil would be especially interested in the mobile telephony assets, while Entel would opt for the fixed-line assets or fixed networks of Movistar Chile's business.

For the moment, it seems that the news has had a positive impact on the markets; Entel's shares soared on the Santiago stock exchange, showing a 9.8 percent increase.

This operation is part of a trend by Telefónica to exit or reduce its presence in non-strategic Latin American markets.

Reports that Telefónica was looking to exit Chile surfaced earlier this year.

Telefónica's Chilean operations can trace its roots back to the 1880s and the Chilean Edison Telephone Company, which later became the Chile Telephone Company. Once owned by International Telephone & Telegraph and then nationized in the 1970s, the company was privatized again by the Bond Corporation in the late 1980s. Telefónica became the majority shareholder in the firm in 1990.