Millicom to acquire Telefónica’s Colombian unit for $400 million

Millicom and Telefonica announced the conclusion of a non-binding memorandum of understanding regarding the potential merger of Telefonica Colombia (Coltel) and TigoUne.

The talks include a potential acquisition by Millicom of Telefonica’s stake in Coltel for approximately $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 in cash and assumed debt with projected free cash flow from equity over the next 18 months, consistent with the company’s long-term plan. The transaction remains subject to negotiations and execution of definitive agreements with all parties involved, including Telefonica, La Nación and EPM, as well as receipt of regulatory and antitrust approvals and other closing conditions. There is no certainty that the transaction will be ultimately completed.

The proposed combined entity would rejuvenate the Colombian telecommunications sector by creating a strong 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. This strengthened operator would strengthen Colombia’s digitalization, provide broader access to modern digital services nationwide, and accelerate the deployment of fiber and 5G technologies nationwide, enabling faster, more reliable services and better customer experiences.