Millicom and Telefonica Seal Key Telecom Deal for Growth
Millicom and Telefonica Form a Strategic Alliance
In an important milestone for the telecommunications sector, Millicom has officially entered into a binding agreement with Telefonica to acquire a controlling 67.5% equity stake in Coltel. This significant step is aimed at enhancing Millicom's footprint in the Colombian market, ensuring that it meets the growing demands for connectivity and digital services.
Details of the Acquisition
This agreement follows the announcement regarding the acquisition intentions. Millicom has committed to not only acquire the majority stake but also place an attractive offer to purchase the remaining 32.5% equity held by La Nación and various investors. Both offers will reflect the same purchase price per share initially set for Telefonica. The total purchase price is projected at $400 million, subject to customary adjustments related to net debt fluctuations and foreign exchange rate changes, bringing the final expected acquisition cost to $362 million as the adjustment date approaches.
The Impact on Colombia's Telecom Sector
The merging of these two companies is anticipated to significantly revitalize the telecommunications sector in Colombia. By forming a unified and robust entity, Millicom aims to meet the critical needs for substantial investments in networks and spectrum to realize the ambitious digital inclusion goals that the country envisions. This combined force is expected to enhance service delivery, ensuring better quality telecom services across diverse regions.
CEO's Perspective on the Future
Marcelo Benitez, the CEO of Millicom, expressed his enthusiasm about this acquisition, stating, "This transaction solidifies our position in Colombia, allowing us to expand our connectivity and coverage. It's a strategic move that aligns with our commitment to Colombia's growth concerning digital transformation and overall competitiveness in the market.”
Further Commitment to Partnering Opportunities
In addition to this acquisition, Millicom is reinforcing its partnership strategy by reiterating its offer to acquire its partner’s 50% share in UNE. This would also be offered at a per-share cash price that reflects a valuation multiple similar to that implied by the current Coltel acquisition—demonstrating Millicom's intent to strengthen its investment and presence in the region.
About Millicom
Millicom, represented on NASDAQ under the ticker TIGO and on the Stockholm Stock Exchange as TIGO SDB, stands out as a significant provider of both mobile and fixed telecommunications services throughout Latin America. Through its trusted brands, TIGO and Tigo Business, the company delivers a broad scope of digital services and solutions. This includes TIGO Money for mobile financial transactions, TIGO Sports for entertainment, and TIGO ONEtv for pay television, along with advanced data services and B2B offerings encompassing cloud and security solutions.
As of the end of the previous year, Millicom employed around 14,000 individuals, boasting a customer base exceeding 46 million across accessible fiber-cable networks. The company's fiber infrastructure reaches approximately 14 million households, showcasing its ability to provide high-quality service across its operational territories. Headquartered in Luxembourg and founded in 1990, Millicom continues to expand its reach and capabilities in the dynamic telecommunications landscape.
Frequently Asked Questions
What is the acquisition deal between Millicom and Telefonica?
The deal involves Millicom acquiring a controlling 67.5% equity stake in Coltel from Telefonica, alongside a purchase offer for the remaining shares held by other investors.
How much is Millicom paying for Coltel?
The intended total purchase price is $400 million, adjusted to approximately $362 million after considering common financial adjustments.
What benefits will this acquisition bring to Colombia?
This merger is set to enhance network scalability and financial capability, crucial for achieving Colombia’s digital inclusion objectives.
Who is leading Millicom?
Millicom is led by CEO Marcelo Benitez, who emphasizes the company's commitment to improving connectivity and contributing to Colombia's digital transformation.
What services does Millicom offer?
Millicom provides a range of services including mobile telecom, financial services through TIGO Money, entertainment options via TIGO Sports, and B2B solutions like cloud and security.
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