Millicom Considers Potential Acquisition of Telefonica’s Coltel for $400 Million

Millicom and Telefonica announce non-binding memorandum of understanding regarding potential merger of Telefonica Colombia (Color) and TigoUne. The discussions include Millicom’s potential acquisition of Telefonica’s stake in Coltel for about $400 million in cash.

Millicom also intends to offer to purchase the minority stake in La Nación and the other shares in Coltel for cash at the same purchase price per share as was offered to Telefonica. In addition, Millicom intends to offer to purchase the 50% stake in Empresas Públicas de Medellin (EPM) in TigoUne for cash at a comparable valuation multiple to that resulting from the Coltel acquisition.

Millicom plans to fund the proposed total investment of approximately $1 billion with cash and assumed debt, and is projected to generate free cash flow from equity over the next 18 months, consistent with the company’s long-term plan.

The proposed combined entity would rejuvenate the Colombian telecommunications sector by creating a solid telecommunications entity with the necessary scale and financial capacity to support the significant network and spectrum investments required to achieve Colombia’s ambitious digital inclusion goals. Colombia will gain a second large and financially viable operator at a crucial time.