Millicom (Tigo) announces potential acquisitions in Colombia
Millicom (NASDAQ: TIGO) has announced potential acquisitions in Colombia, entering a non-binding memorandum of understanding with Telefonica. The deal involves the possible combination of Telefonica Colombia (Coltel) and TigoUne. Millicom plans to acquire Telefonica's stake in Coltel for about $400 million in cash and intends to offer to purchase La Nación's and other minority interests in Coltel at the same price. Additionally, Millicom aims to acquire Empresas Públicas de Medellin's 50% interest in TigoUne.
The total investment is estimated at $1 billion in cash and assumed debt, to be funded through equity free cash flow over the next 18 months. The transaction is subject to definitive agreements, regulatory approvals, and other conditions. If successful, the combined entity would create a robust telecom operator in Colombia, supporting digital inclusion objectives and advancing Fiber and 5G technologies deployment.
Millicom (NASDAQ: TIGO) ha annunciato potenziali acquisizioni in Colombia, firmando un memorandum di intesa non vincolante con Telefonica. L'accordo coinvolge la possibile fusione tra Telefonica Colombia (Coltel) e TigoUne. Millicom prevede di acquisire la quota di Telefonica in Coltel per circa 400 milioni di dollari in contanti e intende offrire di acquistare la quota di La Nación e altri interessi di minoranza in Coltel allo stesso prezzo. Inoltre, Millicom mira ad acquisire il 50% di Empresas Públicas de Medellin in TigoUne.
L'investimento totale è stimato in 1 miliardo di dollari in contanti e debito assunto, da finanziare attraverso il flusso di cassa operativo libero nei prossimi 18 mesi. La transazione è soggetta a accordi definitivi, approvazioni normative e altre condizioni. Se avrà successo, l'entità combinata creerebbe un robusto operatore telecom in Colombia, sostenendo gli obiettivi di inclusione digitale e promuovendo il dispiegamento della fibra e delle tecnologie 5G.
Millicom (NASDAQ: TIGO) ha anunciado adquisiciones potenciales en Colombia, al firmar un memorando de entendimiento no vinculante con Telefonica. El acuerdo implica la posible combinación de Telefonica Colombia (Coltel) y TigoUne. Millicom planea adquirir la participación de Telefonica en Coltel por alrededor de 400 millones de dólares en efectivo e intende ofrecer comprar la participación de La Nación y otros intereses minoritarios en Coltel al mismo precio. Además, Millicom busca adquirir el 50% de Empresas Públicas de Medellín en TigoUne.
La inversión total se estima en 1 mil millones de dólares en efectivo y deuda asumida, que se financiará a través del flujo de efectivo libre de capital durante los próximos 18 meses. La transacción está sujeta a acuerdos definitivos, aprobaciones regulatorias y otras condiciones. Si tiene éxito, la entidad combinada crearía un robusto operador de telecomunicaciones en Colombia, apoyando objetivos de inclusión digital y avanzando en la implementación de tecnologías de Fibra y 5G.
밀리컴 (NASDAQ: TIGO)은 콜롬비아에서 Telefonica와 비구속 양해각서를 체결하며 잠재적 인수 계획을 발표했습니다. 이 거래는 Telefonica Colombia (Coltel)과 TigoUne의 가능한 결합을 포함합니다. 밀리컴은 Coltel에서 Telefonica의 지분을 약 4억 달러에 현금으로 인수할 예정이며, La Nación 및 Coltel의 기타 소수 지분을 같은 가격에 인수하겠다고 제안할 계획입니다. 추가로, 밀리컴은 Empresas Públicas de Medellín의 50% 지분도 인수할 것으로 보입니다.
총 투자는 10억 달러에 달하며, 이는 향후 18개월 동안의 자유 현금 흐름으로 자금을 조달할 예정입니다. 이 거래는 최종 계약, 규제 승인 및 기타 조건에 따릅니다. 성공할 경우, 결합된 기관은 콜롬비아에서 강력한 통신 운영사를 만들어 디지털 포용 목표를 지원하고 광섬유 및 5G 기술 배치를 진전시킬 것입니다.
Millicom (NASDAQ: TIGO) a annoncé des acquisitions potentielles en Colombie, en signant un mémorandum d'accord non contraignant avec Telefonica. L'accord concerne la possible combinaison de Telefonica Colombia (Coltel) et TigoUne. Millicom prévoit d'acquérir la part de Telefonica dans Coltel pour environ 400 millions de dollars en espèces et a l'intention d'offrir d'acheter la participation de La Nación et d'autres intérêts minoritaires dans Coltel au même prix. De plus, Millicom vise à acquérir la participation de 50 % d'Empresas Públicas de Medellín dans TigoUne.
L'investissement total est estimé à 1 milliard de dollars en espèces et en dettes prises en charge, à financer par le flux de trésorerie libre des fonds propres au cours des 18 prochains mois. La transaction est soumise à des accords définitifs, à des approbations réglementaires et à d'autres conditions. En cas de succès, l'entité combinée créerait un opérateur de télécommunications robuste en Colombie, soutenant des objectifs d'inclusion numérique et faisant avancer le déploiement des technologies Fiber et 5G.
Millicom (NASDAQ: TIGO) hat potenzielle Akquisitionen in Kolumbien angekündigt und ein nicht verbindliches Memorandum of Understanding mit Telefonica unterzeichnet. Der Deal betrifft die mögliche Kombination von Telefonica Colombia (Coltel) und TigoUne. Millicom plant, den Anteil von Telefonica an Coltel für etwa 400 Millionen US-Dollar in bar zu erwerben und beabsichtigt, La Nación und andere Minderheitsanteile an Coltel zu demselben Preis zu kaufen. Darüber hinaus beabsichtigt Millicom, die 50%-Beteiligung der Empresas Públicas de Medellín an TigoUne zu erwerben.
Die Gesamtinvestition wird auf 1 Milliarde US-Dollar in bar und übernommenen Schulden geschätzt, die über den freien Cashflow des Eigenkapitals in den nächsten 18 Monaten finanziert werden soll. Die Transaktion unterliegt endgültigen Vereinbarungen, behördlichen Genehmigungen und anderen Bedingungen. Im Erfolgsfall würde die kombinierte Einheit einen robusten Telekommunikationsanbieter in Kolumbien schaffen, der die Ziele der digitalen Inklusion unterstützt und den Ausbau von Glasfaser- und 5G-Technologien vorantreibt.
- Potential creation of a stronger, more competitive telecom entity in Colombia
- Estimated $1 billion investment demonstrating commitment to market growth
- Opportunity to improve digital infrastructure and services across Colombia
- Potential for accelerated deployment of Fiber and 5G technologies
- Transaction is subject to multiple approvals and conditions, with no certainty of completion
- Significant cash outlay of approximately $1 billion required for the acquisitions
- Potential integration challenges and costs associated with combining multiple entities
Insights
Millicom's potential $1 billion investment in Colombia's telecom sector marks a significant strategic move. The proposed acquisition of Telefonica's stake in Coltel for
Key financial implications:
- The deal would be funded through equity free cash flow over 18 months, aligning with Millicom's long-range plan. This approach suggests strong cash generation capabilities and financial discipline.
- The transaction's structure, combining cash and assumed debt, indicates a balanced approach to leverage and risk management.
- Creating a larger, more competitive entity could lead to improved economies of scale, potentially boosting profitability and market share.
However, investors should note the non-binding nature of the agreement and regulatory hurdles ahead. The $1 billion price tag is substantial, representing about
The strategic rationale appears sound, potentially strengthening Millicom's position in a key Latin American market. However, the success will hinge on effective integration and realization of synergies to justify the investment.
This potential consolidation in Colombia's telecom sector is a game-changer. By combining Telefonica Colombia (Coltel) and TigoUne, Millicom aims to create a formidable second player in the market, capable of challenging the incumbent's dominance.
Key industry implications:
- Increased competition: A stronger second operator could drive innovation and potentially lead to better services and pricing for consumers.
- Accelerated infrastructure development: The combined entity would have greater resources to invest in critical technologies like Fiber and 5G, potentially speeding up Colombia's digital transformation.
- Market dynamics shift: This move could trigger further consolidation or strategic responses from other players in the Colombian and broader Latin American telecom market.
The emphasis on supporting Colombia's digital inclusion objectives aligns with global trends of governments partnering with telecom operators to bridge the digital divide. This could potentially lead to favorable regulatory treatment, although antitrust scrutiny remains a key hurdle.
If successful, this deal could serve as a template for similar market consolidations in other developing economies, where scale is important for sustaining the high capital expenditures required in the telecom sector.
Millicom's strategic move in Colombia reflects broader trends in the Latin American telecom market:
- Market Consolidation: As margins tighten and infrastructure costs rise, operators are seeking scale through M&A to remain competitive.
- Digital Transformation: There's a growing focus on expanding digital services and improving connectivity, especially in underserved areas.
- 5G Race: Operators are positioning themselves to lead in 5G deployment, which requires significant investment.
Colombia, with a population of over 50 million and a growing digital economy, represents a significant opportunity. However, the market faces challenges:
- Digital Divide: There's a substantial gap in connectivity between urban and rural areas.
- Infrastructure Investment: Significant capital is needed to upgrade networks and expand coverage.
- Regulatory Environment: Government policies play a important role in shaping the competitive landscape.
Millicom's move could potentially address these challenges by creating a stronger, more financially capable operator. If successful, this could accelerate Colombia's digital development and potentially serve as a model for other markets in the region.
Investors should monitor how this deal, if completed, impacts market dynamics and whether it leads to improved service quality and coverage for Colombian consumers. The success of this consolidation could influence similar strategies in other Latin American markets where Millicom operates.
Millicom (Tigo) announces potential acquisitions in Colombia
Luxembourg, July 31st, 2024 – Millicom (NASDAQ: TIGO) and Telefonica today announced that they have entered into a non-binding memorandum of understanding for the potential combination of Telefonica Colombia (Coltel) and TigoUne. The discussions include the potential acquisition by Millicom of Telefonica’s stake in Coltel for approximately
Millicom also intends to offer to purchase La Nación’s and other minority interests in Coltel for cash at the same purchase price per share offered to Telefonica. Additionally, Millicom intends to offer to purchase Empresas Públicas de Medellin’s (EPM)
Millicom plans to fund the proposed aggregate investment of approximately
The proposed combined entity would rejuvenate Colombia's telecom sector by forming a robust telecom entity with the necessary scale and financial capacity to support the significant network and spectrum investments required to achieve Colombia's ambitious digital inclusion objectives. Colombia will gain a second large scale and financially viable operator at a crucial moment. This strengthened operator would bolster the digitalization of Colombia, ensure broader access to modern digital services across the country and advance the deployment of both Fiber and 5G technologies across the country, thereby enabling faster and more reliable services and an improved customer experience.
Regulatory Statement
Certain of this information was, prior to this release, inside information and is information that Millicom is obliged to make public pursuant to the EU Market Abuse Regulation. This information was submitted for publication, through the agency of the contact person set out above, at 7:30 CET on July 31, 2024.
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For further information, please contact:
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| Sofia Corral, Director Corporate Communications press@millicom.com | Michel Morin, VP Investor Relations investors@millicom.com |
About Millicom
Millicom (NASDAQ U.S.: TIGO, Nasdaq Stockholm: TIGO_SDB) is a leading provider of fixed and mobile telecommunications services in Latin America. Through our TIGO® and Tigo Business® brands, we provide a wide range of digital services and products, including TIGO Money for mobile financial services, TIGO Sports for local entertainment, TIGO ONEtv for pay TV, high-speed data, voice, and business-to-business solutions such as cloud and security. As of March 31, 2024, Millicom, including its Honduras Joint Venture, employed approximately 15,500 people, and provided mobile and fiber-cable services through its digital highways to more than 45 million customers, with a fiber-cable footprint over 14 million homes passed. Founded in 1990, Millicom International Cellular S.A. is headquartered in Luxembourg.
FAQ
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