Imagine if the grocery store, the cell phone provider, and biggest national construction outfit were all owned by the same company. You could buy just about anything and never have to enrich any competitors. That's essentially the situation in Mexico, where one of the world's top-five richest people, Carlos Slim Helú, resides.

How he amassed his wealth – north of $70 billion, according to the Forbes list — is a study in both business acumen and political connections.

First, what do people mean when they say he's so rich? Slim (obviously) doesn't have all those billions sitting in a vault. It's a measure of his total holdings in various companies as well as his "real" assets. That said, Slim has a sizeable piece of many companies that he owns. For example, the Slim family owns, via a trust, 65% of the capital of telecom América Movil (AMX) (AMOV), perhaps the biggest pieces of the Slim empire. Slim himself owns some 8% of the company, according to its website.

A Wide Reach

Slim has a hand in literally hundreds of other companies, largely through Grupo Carso. Grupo Carso has stakes in enterprises as diverse as Elementia, one of the largest cement companies in Mexico, a hand in retail (via Sears), energy and construction (via CICSA) and automotive (via Grupo Condumex). He has a sizable stake in Saks Fifth Avenue, and even bought 17% of the New York Times. (See also: Top 4 Frugal Billionaires.)

Perhaps the biggest piece of Slim's wealth comes from telecommunications. Via Grupo Carso and a family trust, as well as his own personal shareholdings, Slim is the owner of América Movil, formerly Teléfonos de Mexico, or Telmex. Telmex was the old telephone monopoly in the country, akin to AT&T Inc. (T). In the 1990s, the government privatized the company, and Slim was one of the initial investors, via Grupo Carso (the other members of the consortium were France Télécom and Southwestern Bell Corporation). The price: $1.8 billion, half of which was put up by Grupo Carso, for a 20% stake. Carlos Slim was at the helm of Grupo Carso, and as such took over at Telmex.

By 2012, América Movil, Slim's mobile telephony company, had taken over Telmex and made it into a privately-held subsidiary. América Movil, via the subsidiary Telcel, has a market share approaching 70 percent of the mobile phone line market, and 80 percent of the landlines in Mexico. Now the company is poised to sell assets to bring its market share below 50 percent, in the wake of new anti-monopoly regulations in Mexico. But Slim is probably not upset that the various assets, such as cell phone towers, could easily bring in $8 billion or more – quite a profit on the original investment. (See also: Piggyback the Smart Money.)

Not Just Mexico

América Movil, through various subsidiaries, isn't just in Mexico. In the U.S., the most visible brand is TracFone, a low-cost cellular phone operator. In Austria, the company owns 23% of Telekom Austria. Slim's telecoms empire reaches every country in Latin America except Venezuela and Bolivia.

Yet it wasn't necessarily a deep knowledge of technology or telecommunications that made the company what it is today. Slim has often said that his strategy is to reinvest the profits into the business itself, and fuel growth. Telmex, for example, invested billions over several years to install an updated fiber network in the 1990s, and that left the company in a position offer high-speed internet service.

The pattern is typical of Slim's business deals over the course of his life – buy an asset, reinvest, and sell at a profit. Telecommunications is only the most visible piece of that strategy. (See also: 6 Rules From the World's Top Investors.)

A Buying Opportunity

Slim started out as a stockbroker, with the founding of Grupo Financiero Inbursa in 1965. One of his biggest opportunities – even beyond the privatization of Telmex – was the peso crisis in the early 1980s, coupled with a steep decline in oil prices. Capital was fleeing the country, and Slim bought a number of companies at depressed valuations.

Some examples are Cigatam (the country's second-largest cigarette maker), Reynolds Aluminum, General Tire and the Sanborns chain of stores. Sanborns went public last year, raising about $950 million. Multiply transactions like that over the course of Slim's life and it's not hard to see how he got where he is.

Turnaround Specialist

Slim's strategy has been to buy up sometimes troubled companies and try to turn them around. The advantage of that model is that it doesn't necessarily require a specific knowledge of any given sector – just a keen sense of what is undervalued and what isn't. (See also: Value Investing: Find Undervalued Stocks.)

In addition, the conglomerate structure allows him to have stakes in so many industries that his wealth is nearly as recession-proof as it is possible to be. His stocks might lose value in a general market downturn that affects the whole economy. But a problem in the telecommunications industry won't hurt his numbers much, because some other sector will likely be doing reasonably well.

Slim is also less interested in the fine details of the businesses he buys. Any transaction is just that – the goal is to sell his stake at a profit later. Even his recent purchase of a stake in the New York Times is less about editorial policy and more about the idea that the paper can gain value as an asset, as Eduardo Garcia, editor of Sentido Común, a financial news site, told the American Journalism Review in 2009.

An Understated Billionaire

That might be a factor in why Slim was under the radar of most Americans for decades. Slim isn't flamboyant and he didn't launch a transformative product. In that sense he is the anti-Steve Jobs and his transformational Apple devices. Slim rarely speaks to the press at all, and only recently raised his public profile. (See also: What Bill Gross, Steve Jobs and Steve Wynn Share.)

That doesn't address the down sides of individuals owning so much wealth. Slim's net worth is so large it rivals the gross domestic products of some small nations. That's bought him a lot of political influence. It's no accident that Mexico has relatively weak anti-monopoly laws. Garcia has written that one problem is that regulations that affect Slim-owned properties are often enforced lightly, if at all. It's hard to imagine the U.S. Justice department, for instance, tolerating the kind of control over the telecoms industry that Slim built. (See also: A History of U.S. Monopolies.)

Cornering the Market

Another issue is monopolistic practices. One of the assets Slim picked up with Telmex was one of the largest Mexican makers of copper wire. He then stopped Telmex from buying wire from the company's competitor, which forced that competitor to sell to an American concern. When the Mexican government attempted to increase competition in the phone business, it didn't account for the fact that new companies had to pay Telmex an interconnection fee.

Telmex simply set such fees very high, making it tougher for any other provider to undercut prices, especially for long distance calls. (Eventually the practice stopped, after much negotiation between the government, Slim and the upstarts). (See also: How Monopoly Antitrust Laws Affect Consumers.)

Even when anti-monopoly laws force Slim's companies to sell assets, there's a sense that it might just be an end-run around the law. For example, in January a Mexican court ordered Telmex to stop selling a division that holds fiber optic lines and telephone poles. Once the division was no longer part of Telmex, it's possible that the company wouldn't fall under certain antitrust rules anymore, giving Slim a freer hand.

Critics have noted that with Slim's companies owning such large market shares, and driving out competitors, the Mexican economy has suffered. A lack of an even playing field means that new entrants have a tougher time mounting a challenge to an incumbent player. (See also: Increasing Regulatory Burdens Depressing America Movil's Growth.)

The Bottom Line

Slim's fortune is more like that of the old Rockefeller family than Bill Gates. Instead of building an empire on a few great innovations in a particular field, he did so through acquisitions and building a nearly unassailable market share. (See also: J.D. Rockefeller: From Oil Baron to Billionaire.)

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