Carlos Slim gets new competition in Colombia
FT.com – Get ready for some competition in Colombia Carlos Slim. Millicom International, a Luxembourg-based telecoms company, on Monday announced plans to merge is Colombian operations with the fixed-line business of state-run Empresas Públicas de Medellín (EPM) in a move to create “a leading digital lifestyle company” in the country.
Millicom, a group controlled by Sweden’s Kinnevik investment group that focuses on emerging markets, has been operating in Colombia since 2006 when it bought a controlling stake in Colombia Móvil for $478m.
Millicom said in a statement the deal is expected to be sealed by the end of the first quarter of next year and that the integrated company would have over 8.4 million fixed line and mobile customers in a country of 46 million people.
Millicom already operates in Colombia under the Tigo brand through a consortium with EPM (which runs its mobile business under the UNE logo) and another state-controlled company, Empresa de Telecomunicaciones de Bogotá (ETB).
Tigo is currently the third largest mobile phone operator in Colombia with over 6 million clients, behind Slim’s América Móvil, which operates under the Claro brand, and Telefónica’s Movistar.
The proposed transaction implies a pre-deal enterprise valuation of Tigo (Millicom’s Colombian business) of approximately US$$1.3 billion, and a pre-deal enterprise valuation of EPM’s fixed line business (UNE) of approximately US$$2.1 billion.
Indeed, this would pit the Millicom-EPM consortium against Slim’s Claro that also acts as the local subsidiary of his fixed-line unit, Telmex, offering broadband and cable TV and is already one of the market leaders in Colombia.
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