Millicom International Cellular has entered into exclusive negotiations with Colombian operator EPM regarding the possible combination of their Colombian telecom operations. The purpose of the negotiation is to evaluate the possibility of a merger between Tigo (the holding company that owns 50 percent of Colombia Movil), and UNE EPM to create an integrated telecommunication operator in Colombia.
EPM (Empresas Publicas de Medellin) is an industrial and commercial conglomerate owned by the municipality of Medellin. It is the largest shareholder of UNE EPM Telecomunicaciones (UNE) which provides cable TV and fixed telephony services across the Medellin city area. UNE owns 25 percent of Colombia Movil (‘Tigo Colombia’), in which Millicom owns 50 percent and one share.
UNE and Tigo Colombia product portfolios and geographic presences are complementary. Under the terms provisionally discussed between the two parties, Millicom and EPM would contribute their respective telecommunication businesses in Colombia into a newly created entity. Should an agreement be reached, Millicom does not anticipate that its consolidated Net Debt to EBITDA ratio will exceed 1.5x (post-transaction).
The discussions are expected to conclude during the first half of this year.
