Millicom International Cellular S.A., operating in Costa Rica under the Tigo brand, has announced an agreement to acquire Telefonica’s mobile telecommunications assets in Panama, Costa Rica and Nicaragua for a total of US$1.65 billion dollars in cash.
The transaction is subject to customary closing conditions, including regulatory approval in each market, and is expected to close in the second half of 2019.
In Costa Rica, Telefonica ranks second (behind Kolbi) and is the market leader in Panama and Nicaragua with a total of 8.7 million users.
The company, operating under the Movistar brand has 2.3 million subscribers in Costa Rica, 1.6 million in Panama and 4.7 million in Nicaragua.
In a statement Millicom described the deal as a perfect complement to its existing operations in the countries, reinforcing its position in Central America following the recent acquisition of Panama’s Cable Onda for US$1 billion.
“We are acquiring the number 1 mobile operator in Panama and in Nicaragua and the number 2 mobile operator in Costa Rica. As a result, we now have both fixed and mobile in every market we operate in Latin America,” said Millicom CEO Mauricio Ramos, adding that “the transaction gives us full in-market scale and the benefits of significant synergies.”
The purchase of Panama, Costa Rica and Nicaragua operations represents for Millicom an expansion of its regional presence and in the same markets where it already had a presence in the cable and Internet sector, both at the residential and corporate levels.
In Costa Rica, Millicom has carried out an intense expansion of its cable television and Internet services, with the recent acquisition of Cable Zarcero and Cable Max in Cañas.
In Panama, it recently acquired Cable Onda, a well-known internet subscription television company in that country.
Millicom also has a presence in Guatemala, Honduras and El Salvador in the mobile telephony market and in the residential segment (with subscription television and Internet services), also under the Tigo brand.
The purchase of Telefónica’s operations allows it to standardize its regional portfolio.
In all countries, it also offers services at the corporate level.
In Latin America, Millicom has a presence in Bolivia, Paraguay and Colombia with a total of 10 million mobile and 3.1 million residential cable subscribers.
Telefonica leaves Central America
Meanwhile, with the sale to Millicom of its Costa Rica, Panama and Nicaragua units, complete’s Telefonica’s operations in Central America after reaching a deal last month to divest its Guatemala and El Salvador units to America Movil (Claro)