LatAm telco Millicom in talks with two investors over full buyout

Latin America-focused telco Millicom has confirmed that talks are taking place with investment funds Apollo Global Management and Claure Group to take over its entire regional business.

“As a response to market speculation, the Board of Directors of Millicom International Cellular S.A. confirms that a potential acquisition of all outstanding shares in Millicom is being discussed with Apollo Global Management and Claure Group,” Millicom said in a statement.

The Luxembourg-headquartered group added that “there is no certainty that a transaction will materialize nor as to the terms, timing or form of any potential transaction.”

Market rumors have it that the deal could be announced for US$10bn, including debt. 

In November, Millicom announced that Atlas Investissement, a wholly-owned subsidiary of NJJ Holding held indirectly by Xavier Niel, a French billionaire and the proprietor of telco Iliad, had acquired a 7% stake in the group for an undisclosed sum.

US firm Apollo Global had an estimated US$92bn in private equity assets under management as of September 30. Its investments in Latin America include energy and infrastructure assets.

Claure Group is a newly created global investment firm that claims to be focused on technology, media, telecommunications, crypto, sports, real estate and other high-growth sectors.

The company was founded by Bolivia-born Marcelo Claure.

Until early 2022, Claure was executive director at SoftBank Group International and director of operations at SoftBank Group Corporation, being responsible for several investments made by the Japanese fund in Latin America.

LATIN AMERICA

After exiting Africa last April, Millicom’s operations have been focused solely on Latin America. 

The company operates under the Tigo brand in nine markets: Bolivia, Colombia, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama and Paraguay.

Last year, the company committed to invest US$1bn per year in Latin America for the next three years. 

In 3Q22, Millicom’s revenue grew 37.9% year-on-year to US$1.38bn, bolstered by positive results in Guatemala. Last year, Millicom spent over US$2bn to fully buy its Guatemalan JV. Millicom will announce its 4Q22 and full-year 2022 results on February 10.

As of end-September, Millicom had over 40mn mobile customers, up 160,000 year-on-year. The company gained customers in almost every country, except Guatemala and Bolivia, where numbers of prepaid clients declined. 

It also reported 12.7mn homes passed with its fixed networks as of September 30, up 6.4%, and 250,000 during the quarter, for 4.78mn clients (customer relationships), which was an increase of 2.3%.

The company added over 500 points-of-presence (antennas or sites) to its 4G network, ending the quarter with 17,000, up 15% year-on-year.