Telefónica exits Colombia following completion of Millicom sale

Telefónica continues its rapid pace of divestments in Latin America.

After exiting Argentina in February with the US$1.2bn sale of its local operation to Telecom Argentina, the Spanish telecom giant is now pulling out of Colombia.

Telefónica announced that it completed the sale of its controlling stake in Coltel (Movistar Colombia) to Millicom.

The two European telecom groups entered into a definitive agreement for Millicom to acquire Telefónica’s 67.5% equity stake in Coltel, though the transaction remains subject to closing conditions and regulatory approvals.

The final deal was sealed at US$362mn after adjustments to the preliminary agreement reached last July.

Millicom also agreed to extend an offer to purchase the remaining 32.5% of Coltel equity held by La Nación and other investors, at the same price per share offered to Telefónica.

“The proposed combined entity would rejuvenate Colombia's telecom sector by forming a robust telecom entity, with the necessary scale and financial capacity to support the significant network and spectrum investments required to achieve Colombia's ambitious digital inclusion objectives,” Millicom stated.

Beyond the Telefónica acquisition, Millicom reaffirmed its interest in purchasing EPM's shares in Une-EPM. 

"If EPM decides to sell, we will offer the same valuation multiple agreed for Coltel, which is the best possible comparable valuation for a transaction like this," Millicom CEO Marcelo Benítez said during the company's Q4 earnings call.

Telefónica’s Latin American sell-off is far from over, as the company is currently negotiating the divestment of its Mexican and Peruvian units. It has already exited Central America.

The only remaining operation in Latin America that remains untouched is in Brazil, which Telefónica considers one of its four core markets alongside Spain, the UK and Germany.