Stockholm-listed Millicom and Colombia-owned conglomerate EPM have signed an agreement to merge their telecoms and media businesses in the South American country.
The convergent deal would see Colombia’s third largest wireless operator, Tigo…
Stockholm-listed Millicom and Colombia-owned conglomerate EPM have signed an agreement to merge their telecoms and media businesses in the South American country.
The convergent deal would see Colombia’s third largest wireless operator, Tigo Colombia, unite with UNE EPM, which offers cable TV, broadband and fixed-line telephony.
The two sides reached a deal in principal in July and have now settled on the terms of a transaction, which will go before regulators.
The deal requires approvals from the Superintendencia de Sociedades (corporations authority), Superintendencia de Industria y Comercio (consumer protection and competition authority), Superintendencia Financiera (financial authority) and the Autoridad Nacional de Television (television industry regulator).
Commenting on the signing of the agreement, Millicom CEO Hans-Holger Albrecht said: “It brings even closer the prospect of creating an exciting new business to provide a complete range of digital services to the people of Colombia. Meanwhile, we will work hard with the Colombian authorities to provide all the information they need to assess the proposed merger.”
Further details about the terms of the merger have not been disclosed but the deal is expected to add US$1.1bn to the emerging-market specialist’s balance sheet as the new combined company will be fully consolidated upon closing. Millicom has previously said a deal will be completed by the end of Q1 2014.
UNE EPM already has a 25% stake in Millicom’s local wireless operator Tigo Colombia. Millicom owns 50% plus one share of Tigo Colombia via an investment vehicle and is looking to merge that vehicle with UNE.
Millicom and EPM would each own half of the merged company, but Millicom is looking for management control.
Millicom entered negotiations with EPM in early January regarding a possible merger. In May a significant approval was won after the council of the Colombian city of Medellin voted 11 to nine in favour of changing the ownership structure of UNE to pave the way for a merger. EPM is owned by Medellin.
