America Movil inked a deal with Liberty Latin America to combine their respective Chilean mobile, fixed and TV operations into a jointly-owned venture.
The newly formed business will comprise mobile operator Claro Chile and Liberty Latin America’s local fixed and broadcast business VTR.
In a statement, the two explained the deal would create a business with greater scale, diversification of products, and structure to allow “significant investment” in expanding fibre and 5G coverage in the country.
Claro Chile has more than 6.5 million mobile customers, the new partners said, while VTR has a base of almost 3 million.
Joining the two operations is estimated to create run-rate synergies of $180 million with 80 per cent of these savings expected within the first three years. The two plan to make “network and operating efficiencies” and increase revenue from cross-selling products.
America Movil’s towers in the country have been excluded from the deal.
To complete the transaction Liberty Latin America will make a balance payment of CLP73 billion ($90.6 million) to America Movil.
The deal is subject to regulatory approval and is expected to close in H2 2022. Neither company’s shareholders are required to approve the move.