Millicom Rejects Atlas Bid, Unveils Movistar Merger Deal, EPM Share Bid
Luxembourg-based multinational telecom-internet-cable-TV giant Millicom announced today (July 31) a deal whereby Millicom and Spain-based Telefonica would merge their Colombia operations and also buy-out EPM´s 49.9% stake in Tigo-UNE.
The announcement comes on the heels of Millicom´s rejection of the recent US$4.1 billion buyout offer from telecom competitor Atlas Luxco and a subsequent proposal from Medellin Mayor Federico Gutierrez to sell EPM´s half-ownership of Tigo-UNE (see Medellin Herald July 25, 2024).
“The discussions include the potential acquisition by Millicom of Telefonica’s stake in Coltel [aka ´Movistar´] for approximately US$400 million in cash,” according to Millicom.
“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 EPM´s interest in Tigo-UNE for cash at a comparable valuation multiple as the one implied by the Coltel acquisition.”
Millicom estimates the proposed deals will require investments at approximately US$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,” according to the company.
“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.
“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,” Millicom added.
