Entel, Grupo GTD to merge operations

Tuesday, November 29, 2011

Chilean telecoms operators Grupo GTD and Entel have signed a nonbinding letter of intent to merge their operations, the companies said in separate filings to securities regulator SVS.

The agreement was signed between Inversiones Altel, a subsidiary of Entel's controller Almendral Telecomunicaciones, and GTD's controller Inmobiliaria e Inversiones El Coigüe.

Once the due diligence process has been completed and the agreement approved by the shareholders of both parties, Inmobiliaria e Inversiones El Coigüe's direct and indirect holdings in Entel will be 9.8%.

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In addition, the merger allows GTD to appoint a representative to Entel's board.

Additionally, both entities have committed to signing a final and binding contract by December 23.

Under the agreement, all telecoms operators that are part of Grupo GTD will become subsidiaries of Entel, including: Teleductos, Telesat, GTD Internet, GTD Largadistancia, GTD Imagen and GTD Manquehue, Compañía Nacional de Teléfonos, Telefónica del Sur and Compañía de Teléfonos Coyhaique (Telcoy).

The merger will allow Entel to more than double its presence in the local fixed telephony market which is GTD's core business.