Emerging markets operator Millicom, which operates under the Tigo brand, is in advanced negotiations with Colombian conglomerate EPM about a merger of their local telecoms operations.
State-owned EPM already has a 25% stake in Tigo Colombia, via its…
Emerging markets operator Millicom, which operates under the Tigo brand, is in advanced negotiations with Colombian conglomerate EPM about a merger of their local telecoms operations.
State-owned EPM already has a 25% stake in Tigo Colombia, via its cable unit UNE EPM Telecomunicaciones. Millicom owns 50% plus one share of Tigo Colombia.
Millicom said it is looking to merge the holding company that holds 50% in Tigo with UNE.
A spokesperson for the Stockholm-listed operator said that both parties would own 50% in the merged entity, but that Millicom was seeking to have control over the business.
Financial details of a potential deal were not disclosed, but Millicom said it does not expect that a successful transaction would result in its net debt to EBITDA ratio to exceed 1.5x. In 2011 Millicom generated revenue of US$4.53bn and EBITDA of US$2.09bn.
UNE provides fixed-line, internet and HDTV services while Tigo offers mobile telephony.
“We are pleased to have reached an advanced stage in our discussions with EPM,” Millicom CEO Hans-Holger Albrecht said.
“It is a compelling opportunity that we want to pursue further to enhance shareholder value.”
In a statement, Millicom emphasised the complementary nature of the two businesses, both in terms of services and geographical area. The discussions are expected to conclude during the first half of 2013.
Commenting on the talks, EPM’s CEO Juan Esteban Calle said: “We are optimistic about the conversations with Millicom.
“We believe that our markets and strengths are naturally complementary and there is a fit in corporate values such as transparency, social responsibility and customer orientation.”
