Colombian Telcos in Merger Talks

Published on: 5th Feb 2013

­Millicom has announced that it is in merger talks that could see its Colombian subsidiary merged with the landline networks of their joint-shareholder in the country.

Millicom owns 50% of Colombia Móvil (Tigo) while EPM (Empresas Públicas de Medellín) is the largest shareholder in UNE, which also owns a 25% stake in Tigo.

The purpose of the negotiation is to evaluate the possibility of a merger between the holding company that owns 50% of Tigo and UNE EPM to create an integrated telecommunication operator in Colombia.

Recently, UNE has started offering mobile services, in part through a roaming agreement with Tigo Colombia.

Hans-Holger Albrecht, President and CEO for Millicom, commented: "We are pleased to have reached an advanced stage in our discussions with EPM. It underlines a few key principles we are working with at Millicom"

Juan Esteban Calle, CEO of EPM, added: "We are optimistic about the conversations with Millicom. It is our fiduciary duty to explore alternatives that will lead UNE EPM to improve its competitive position in the telecommunications industry, a sector we consider strategic for the competitiveness of Medellin, Antioquia and Colombia. 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."

UNE and Tigo Colombia product portfolios and geographic presences are very complementary. The contemplated transaction would be a merger of equals and would be subject to regulatory approval. Under the terms provisionally discussed between the two parties, Millicom and EPM would contribute their respective telecommunication businesses in Colombia into a newly created entity.

The discussions are expected to conclude during the first half of 2013.

 

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