Who are the potential buyers of Millicom?

Millicom’s surprising confirmation of ongoing talks over its full buyout has taken the market by surprise. 

The Luxembourg-based group, which owns the Tigo telecom brand that operates in nine Central and South American markets, is in direct negotiations with US fund Apollo Global Management and newcomer Claure Group. 

Details of the negotiation, such as the stake that each fund would be looking to buy should they make an eventual bid, have not been revealed. But the fact is that the two potential purchasers have distinct trajectories and business profiles.

Apollo is a well-known player in the VC and equity market. It claims to have invested in more than 350 companies in its equity portfolio since it was created back in 1990. 

As of September, it reported US$94bn in assets under management and over 200 investment professionals, in addition to a headcount of over 440,000 people in all of its portfolio companies.

Apollo expects to beef that up over time and reach approximately US$125bn in equity assets by 2026, with around US$1tn in total assets under management, which would include equity, hybrid investments and yield operations. The bulk of Apollo’s portfolio value comes from the latter.

Apollo is due to disclose its 4Q22 and full-year 2022 results on February 9.

In particular, the group says it aims to have a leading role in the energy transition and sustainable investing, but the telecoms and tech sectors have also attracted important investments from the fund.

In September 2010, Apollo bought a 51% stake in Puerto Rico-based transaction processing service Evertec from Popular, the island's largest bank. Three years later, it announced that it was exiting its investment in Evertec. 

In 2020, Apollo bought US tower company Parallel through a corporate carve-out transaction via its second flagship infrastructure fund, before selling it to Harmoni Towers last November.

In its latest move in the telecoms arena, last September Apollo closed a US$7.5bn acquisition of Lumen's US telephone and broadband business Brightspeed. 

Lumen previously divested its Latin American operations, selling them to US fund Stonepeak in 2021 for US$2.7bn in a deal that was closed last August. The new Lumen Latin American operation was rebranded as Cirion.

That same year, Apollo also US$200mn in US fiber broadband company FirstDigital, and in September 2021, Apollo’s funds completed a US$5bn acquisition of Verizon Media (comprising the Yahoo and AOL business), which had different operations in Latin America. 

In 2020, for example, Verizon Media and AMCO, a wholly-owned subsidiary of América Móvil announced a strategic partnership for AMCO to become the exclusive reseller of certain of Verizon Media’s advertising products in Mexico.

Mexico is one of the chief markets in the region targeted by Apollo Global in recent years, especially in infrastructure and banking.

The fund, together with private investors, was a heavy investor in airline Aeroméxico, effectively becoming the largest shareholder of the once-distressed company.

Last October, according to market reports, Apollo joined Abu Dhabi Investment Authority (ADIA) to help fund Mexico's Banca Mifel to launch a bid for Citigroup’s Mexican retail bank Citibanamex.

In Brazil, Apollo is said to be eyeing the country’s petrochemical giant Braskem, having made two proposals to buy the company, the latest of which was last October.

By all accounts, Millicom would be Apollo's first venture in the Latin American telecoms industry.

CLAURE FUND

Claure, meanwhile, is a family office fund founded by Bolivia-born billionaire Marcelo Claure and it has a much shorter track record than Apollo.

The 52-year-old Claure first founded mobile phone distributor Brightstar in the late 1990s, before serving as CEO of US mobile operator Sprint and COO of Japan's Softbank. 

Claure was considered the right-hand man of Softbank CEO Masayoshi Son and was essentially responsible for Softbank's investment strategy in Latin America. 

Softbank itself is one of Apollo's clients for capital solutions. The Japanese group took on two loans provided by Apollo for a total of around US$5.1bn in the last two years, which could help explain the ties between the two groups and their team-up to negotiate for Millicom. 

In January 2022, amid reported disagreements with the Japanese mogul Son, Claure left Softbank to focus on his own investment group. 

There is not much information about the investments made by the Claure Group, which claims to target technology, media, communications, crypto, real estate and even sports for investments. Marcelo Claure is said to have a fortune of over US$2bn. 

The company is listed as being based in Florida and was founded in 2014, eight years before Claure’s exit from Softbank.

Among the deals known to have been carried out by the firm, Claure was involved in a seed round in Mexican vocational training platform Aprende Institute in 2020.

The fund also participated in an US$11.5mn Series A funding round in Credix, a Belgian fintech focused on Latin America companies, in September 2022.

“When I came here with SoftBank, I was very optimistic about the region due to the lack of capital and opportunities, and we managed to equalize Latin America with the rest of the world,” Claure was reported as saying during an event organized by Volpe Capital in São Paulo last May.

“With the flow of resources expected to come with the appreciation of commodities and changes in the supply chain, most of the investments I intend to make will be in Latin America," he also added.