Telefonica entered talks with Millicom over the potential sale of its majority stake in its Colombia business for $400 million, a move announced on the same day the Spain-based operator group released its latest financial statement.
Alongside potentially purchasing Telefonica’s 67.5 per cent stake in the Colombian operator, Millicom plans to make an offer to buy out minority shareholders, which includes Colombia’s ministry of finance.
Should a deal go through Millicom then intends to merge Telefonica Colombia with its operation in the country, TigoUne.
In a stock market statement on the talks Telefonica said the “potential transaction is subject to the signing of the definitive agreements” alongside obtaining regulatory approvals.
Millicom claimed in its statement the “proposed combined entity would rejuvenate Colombia’s telecom sector by forming a robust telecom entity with the necessary scale and financial capacity to support the significant network and spectrum investments required to achieve Colombia’s ambitious digital inclusion objectives”.
Results
News of Telefonica’s potential disposal in Colombia came as it separately released its group results for Q2 where revenue was up 1.2 per cent year-on-year to €10.3 billion with net profit €447 million, down from €462 million last year.
However, it noted when stripping out one-off items its net income would have been €653 million, up almost 44 per cent.
Across the period, the operator pointed to a “favorable performance” in its home market of Spain where it “grew in all the main segments: fixed broadband, mobile contract, television and convergent accesses”.
Discussing the business as a whole, Telefonica chairman and CEO Jose Maria Alvarez-Pallete said “the customer base is larger and more satisfied with the service we provide. Telefónica is a more profitable and sustainable company, meeting the pillars of its GPS [Growth, Profitability and Sustainability] strategic plan”.
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