Spotlight: The biggest LatAm telecom M&As in 2021

The year 2021 was particularly active in consolidation and business combinations in the telecommunications and technology market in Latin America, a trend that is not expected to slow down in 2022.

With tight margins and high costs, the telecom sector is undergoing profound changes in services delivery, with many operators betting on the structural separation of parts of their business and on the sale of units in markets deemed less profitable.

Small operators and internet service providers have also been the target of consolidation, either directly – in the case of the more established players – or indirectly, driven by investment funds and private equity.

In the telecom infrastructure sector, there is also intense movement among cable, tower and datacenter providers, many of which have inorganic growth as an important pillar of their expansion strategy.

Finally, among digital solutions providers, after a huge boom in recent years, e-commerce, fintechs, agtechs and other innovative digital companies are expected to go through a process of "accommodation" through M&As.

Below, BNamericas lists some of the largest acquisitions in the LatAm telecom sector in 2021, including ones that were completed during the year and ones that were announced but are not yet closed.

MILLICOM-MIFFIN

In what was probably the largest regional telecom M&A operation in 2021, Luxembourg-based telecom group Millicom, which operates under the Tigo brand in Latin America, bought the remaining 45% share in its Tigo Guatemala JV from Miffin Associates for US$2.2bn.

Guatemala is Millicom's largest and most cash-generative market in Latin America. The deal is also deemed the largest international deal in Guatemala in decades.

OI-BTG PACTUAL

In July, BTG Pactual funds and GlobeNet won the auction for the partial spin-off of Oi's fiber optic business for 12.9bn reais (US$2.3bn). 

The deal is still pending full clearance, though, which is expected to come in the first quarter of 2022.

AMERICAN TOWER-TELXIUS

The world's largest wireless infrastructure group, American Tower, completed in June the acquisition of the Latin American tower business of Telefónica's infrastructure subsidiary, Telxius, for about US$1.1bn.

The deal included 7,000 towers in Brazil, Peru, Chile and Argentina.

With the announcement, Telefónica completed the sale of Telxius’ tower business as the divestment of the Europe tranche of the deal had already been closed.

LIBERTY LATIN AMERICA-TELEFÓNICA

The chief vendor among the largest telecom groups, Telefónica concluded the sale of its Costa Rican operation to Liberty Latin America for an estimated US$505mn.

The completion of the deal, first announced in July 2020, further expands Liberty's presence in Central America and consolidates the group among the region's main buyers.

AT&T-VRIO

In November, AT&T completed the sale of its Vrio business unit, the Latin American arm of DirecTV, to Argentina’s Grupo Werthein just months after the transaction’s announcement.

Werthein agreed to acquire 100% of Vrio, which offers satellite services in Brazil, Argentina, Barbados, Chile, Colombia, Curaçao, Ecuador, Peru, Trinidad & Tobago and Uruguay. AT&T’s interest in SKY Mexico, however, was not included in the transaction. 

Financial details were not disclosed, but market estimates put the final price paid at US$500mn.

BORDEAUX-COPEL TELECOM

In August, Brazilian fund Bordeaux completed a 2.5bn-real (US$448mn) acquisition of Copel Telecom, the telecommunications subsidiary of Paraná state power firm Copel.

Bordeaux previously acquired Sercomtel, another Paraná state telecommunications company, for 130mn reais. Sercomtel was owned by the city of Londrina (55%) and Copel (45%).

LIBERTY LATIN AMERICA-AMÉRICA MÓVIL

In September, Liberty Latin America went shopping again and struck a deal to acquire América Móvil’s Claro Panama for US$200mn.

With the acquisition of Claro, Liberty aims to strengthen its position in the mobile market and compete with Millicom with packaged services. The deal is expected to close in 2022.

Also in 2021, Liberty Latin America and América Móvil reached an agreement to merge the fixed operations of VTR and the mobile operations of Claro in Chile. The value was not disclosed.

TELEFÓNICA-GENERAL INTERNATIONAL TELECOM

In mid-December, El Salvador's antitrust regulator cleared the sale of Telefónica's Movistar operations to UK fund General International Telecom for 125mn euros (US$141mn).

With the sale of the operations in El Salvador, in addition to those previously concluded in Panama and Nicaragua, both to Millicom, and in Guatemala (to América Móvil), Telefónica completes its exit from Central America.

The Spanish group now has operations in Latin America in Brazil, Mexico (in an MVNO model, using AT&T's network), Colombia, Argentina, Chile, Peru, Ecuador, Uruguay and Venezuela.

In 2021, Telefónica also sold part of its fiber optics business in Brazil, Chile and Colombia, in spin-offs that generated JVs with investment funds KKR (Colombia and Chile) and Canada's CDPQ (Brazil).

The group has already said that its asset rationalization process is set to continue next year.