Liberty Latin America entered talks with Millicom about a potential acquisition of the operator group, a tie-up which would create one of the largest converged operators in the Americas.
Both parties confirmed talks had opened, but gave limited detail on the value of the deal or rationale behind it. In its statement, Millicom said it had received a “preliminary highly conditional non-binding proposal” from the company to acquire all shares.
Should the deal go ahead, the larger company would likely be in a stronger position to compete with rival operator groups in the region offering converged services, including America Movil and Telefonica.
Both companies have wide footprints across the region with several crossover markets.
Liberty Latin America, which spun-off from multinational cable company Liberty Global in January 2018, operates in 21 countries in Latin America and the Caribbean.
It supplies consumer and B2B cable, internet and fixed services in addition to operating a subsea cable network connecting 40 markets. It also offers mobile in some markets, with a total of 3.5 million connections, primarily in the Caribbean and Panama.
Millicom runs mobile operations in eight markets in Latin America: Colombia, Bolivia, Paraguay, Guatemala, Honduras, El Salvador, Costa Rica and Nicaragua. Its own figures show it is either the largest or second-largest operator by connections in each country.
The mobile operator group has also been gradually increasing its fixed and cable footprint since refocusing its strategy in 2016 on new areas of business to offset declines in voice and SMS.
In December 2018, Millicom closed a $1 billion acquisition of Panama cable company Cable Onda, a deal CEO Mauricio Ramos said would complete its cable footprint in central America.
While Millicom expanded its cable footprint in the Americas, the operator group has been lowering its exposure in Africa. In the last two years, it sold operations in Senegal and Rwanda in addition to merging its operation in Ghana with rival Airtel.
In its Q3 2018 earnings statement, Millicom said 8.7 per cent of group revenue came from Africa. This compares to 9.9 per cent in Q3 2017 and 15 per cent in the same quarter of 2016.Subscribe to our daily newsletter Back