Emerging markets telecoms and media group Millicom has completed the drawn-out merger of its Tigo Colombia mobile unit with conglomerate Empresas Publicas de Medellin’s (EPM) fixed-line unit UNE.
Announcing the closure in a statement after market…
Emerging markets telecoms and media group Millicom has completed the drawn-out merger of its Tigo Colombia mobile unit with conglomerate Empresas Publicas de Medellin’s (EPM) fixed-line unit UNE.
Announcing the closure in a statement after market close yesterday, Millicom said the newly-combined company would be fully consolidated immediately.
The Stockholm-listed group also confirmed that its net debt will increase by about US$1.3bn.
Millicom agreed the deal, which will allow it to offer bundled quad-play services in what is now the fastest-growing economy in Latin America, with Medellin city-owned EPM last July after beginning talks in February 2013. It had expected to complete the deal by the end of Q1 this year, but the regulatory process took longer than expected, with final approval from Colombia’s financial watchdog coming in early August.
In yesterday’s statement, Millicom said it has four non-executive directors on the board of the new merged company, while EPM has three. The board has reportedly appointed Santiago Iriarte as the merged company’s CEO.
Millicom president and CEO Hans-Holger Albrecht said the parties are “creating a strong and exciting telecommunications and media business which will provide a full range of digital services and a new choice for the people of Colombia”.
The company noted that the merger takes place as the Colombian economy goes from strength to strength, pointing out that its GDP rose 6.4% in the first quarter and its 12-month growth forecast by the IMF is 4.5% for 2014.
Latin America and Africa-focused Millicom expects the combined company to generate more than US$2bn in annual revenues and have more than eight million customers. The merger forms a key component of its strategy to double its revenue by 2017 and boost profitability.
Prior to the deal, Millicom owned 50% plus one share of Tigo Colombia, while UNE owned the rest. EPM owned 99.9% of UNE.
As a result of the merger, EPM holds 50% plus one share of the combined telco, while Millicom, which is based in Luxembourg, owns the rest and has operational and administrative control.
Tigo Colombia is the third-largest mobile operator in Colombia, while UNE’s fixed-line network covers 2.6 million homes – predominantly in Medellin and surrounding areas – out of 13 million households nationally.
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