Millicom Eyes Potential $400M Acquisition of Telefonica’s Coltel

Millicom and Telefonica 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 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.