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Liberty Latin America acquires Telefonica's Costa Rica unit for EUR 425 mln

Thursday 30 July 2020 | 10:17 CET | News

Telefonica has announced an agreement to sell its mobile telecommunications assets in Costa Rica to Liberty Latin America for a total of USD 500 million (EUR 425 million) in cash, a multiple of around 7.4 times the unit’s 2019 OIBDA. The transaction comes just 3 months after Millicom pulled out of a deal to acquire the unit for USD 570 million, paving the way for legal action from the Spanish operator. Last November Telefonica announced the “operational spin-off” of its remaining Latin American units as part of a restructuring plan to modulate its exposure to the region and focus on its core markets of Spain, the UK, Germany and Brazil.

In a statement, Telefonica said the agreement with Liberty Latin America to sell the entire share capital of its business in Costa Rica is subject to certain closing conditions but, if approved, will result in capital gain before taxes of around EUR 210 million. It added that it intends to maintain the legal action initiated against Millicom due to “unjustified breach” of the terms of the agreement reached in 2019 and will demand compensation for damage caused.

Separately, Liberty Latin America said the deal complements its 2018 acquisition of local fixed-line provider Cabletica and that it now intends to create a leading integrated communications player in Costa Rica. Movistar is the country's second largest mobile provider, with 2.3 million mobile subscribers at the end of June and an LTE network covering 90 percent of the population. The transaction is expected to close in the first half of 2021.



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Categories: Mobile & Wireless
Companies: Liberty Latin America / Millicom / Movistar Costa Rica / Telefonica
Countries: Costa Rica
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