Millicom (Tigo) announces potential acquisitions in Colombia

Rhea-AI Summary

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.

Positive

• 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

Negative

• 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

Millicom (Tigo) announces potential acquisitions in Colombia

Luxembourg, July 31^st, 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 $400 million in cash.

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) 50% interest in TigoUne for cash at a comparable valuation multiple as the one implied by the Coltel acquisition.

Millicom plans to fund the proposed aggregate investment of approximately $1 billion in cash and assumed debt with equity free cash flow projected over the next 18 months, consistent with the company’s long-range plan. The transaction remains subject to negotiation and signature of definitive agreements with all parties involved, including Telefonica, La Nación and EPM, as well as receipt of regulatory and antitrust approvals and satisfaction of other closing conditions. There is no certainty the transaction will ultimately be consummated.

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:

Press:	Investors:
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

What is the value of Millicom's potential acquisition of Telefonica's stake in Coltel?

Millicom plans to acquire Telefonica's stake in Coltel for approximately $400 million in cash.

What is the total estimated investment for Millicom's potential acquisitions in Colombia?

The total estimated investment for Millicom's potential acquisitions in Colombia is approximately $1 billion in cash and assumed debt.

How does Millicom (TIGO) plan to fund the proposed acquisitions in Colombia?

Millicom plans to fund the proposed acquisitions with equity free cash flow projected over the next 18 months, consistent with the company's long-range plan.

What are the potential benefits of Millicom's proposed acquisitions in Colombia?

The proposed acquisitions could create a stronger telecom entity in Colombia, support digital inclusion objectives, and advance the deployment of Fiber and 5G technologies across the country.