More than a year after its announcement, Millicom has won approval from Colombian regulators for its proposed merger with the Andean country’s fixed-line telecom operator Empresas Publicas de Medellin (EPM).
Operating in Colombia under the brand Tigo, Millicom rivals the region’s giant telecom firms such as Telefónica and America Movil’s subsidiary Claro.
The deal values Tigo Colombia at US$1.3bn and EPM at around US$2.1 billion. EPM will hold the majority stake in the firm, with 50% plus one share, while Millicom will hold the remainder.
The merger, analysts say, is beneficial for both firms because Millicom’s international expertise complements EPM’s local knowledge. It is believed that the merger with EMP also makes Millicom the second largest telecom operator in Colombia.
According to its recent quarterly results, the number of Millicom mobile subscribers in South America increased by 1.5 million to 14.4 million.
Emboldened by this sudden growth, the operator rolled out its new Tigo Star brand in Paraguay, Bolivia, Costa Rica, El Salvador and Honduras, while a direct to home (DTH) satellite TV platform was launched in Costa Rica, Honduras, El Salvador, Bolivia and Guatemala.
Partly owned by Swedish investment group Kinnevik, Millicom generates about 40% of its revenue from operations in South America, including Colombia. The operator recently sold its 50% share in Mauritius business to its partner Currimjee, saying it wants to focus on expanding its operations in Latin America.
EPM’s business has experienced growth after it launched fourth generation (4G) telecom services in the first half of last year.