Millicom, owner of Tigo-branded operations across Latin America and Africa, has signed an agreement to acquire the remaining 45 percent equity interest in Tigo Guatemala from its local partner (Miffin Associates Corp) for a total of USD 2.2 billion in cash. The transaction means Millicom will own 100 percent of Tigo Guatemala, increasing the parent company’s equity free cash flow by around USD 200 million before incremental financing costs.
Millicom said bridge financing to fund the deal is being provided by a group of leading international banks, which it intends to refinance with the planned issuance of around USD 1.5 billion of new long-term debt, and USD 750 million of new equity via a rights offering expected in the first few months of 2022.
In a statement, Millicom’s CEO Mauricio Ramos said the acquisition serves to consolidate the group’s position as the leading telecommunication service provider in Central America. “With this transaction, we will transform the financial profile of Millicom, significantly increase our cash flow and net income and greatly simplify our structure,” he said.
Tigo Guatemala is currently the leading mobile operator in the country with 11.6 million subscribers, the leading fixed broadband provider with 392,000 subscribers and the second largest pay-TV provider with 567,000 customers. Millicom recently reported that its overall operating profit more than doubled (+103.6%) to USD 197 million in the third quarter thanks in part to increased profitability in Guatemala.
