Millicom to take full control of Tigo Guatemala for $2.2 billion

Millicom announced today that it has signed an agreement to acquire the remaining 45% equity interest in its joint venture businesses in Guatemala (collectively, “Tigo Guatemala”) from our local partner for $2.2 billion in cash. The transaction was signed today and is expected to close later today. As a result, Millicom will own a 100% equity interest in Tigo Guatemala. The transaction is expected to be significantly and immediately accretive to Millicom’s cash flow and net income and to increase Millicom’s equity free cash flow1 by approximately $200 million before incremental financing costs.

Bridge financing to fund the transaction is being provided by a group of leading international banks. Millicom intends to refinance the bridge with the planned issuance of approximately $1.5 billion of new long-term debt, and approximately $750 million of new equity via a rights offering2 expected for Q1 2022. Giving effect to the transaction and the planned equity offering, Millicom’s leverage1 is expected to be approximately 3.1x in Q1 2022 and to continue to decline thereafter towards the company’s leverage target of 2.0x.

With this transaction, Millicom consolidates its position as the leading telecommunication service provider in Central America.

Millicom CEO Mauricio Ramos said: “We are delighted to have signed this agreement to consolidate a 100% ownership position in Tigo Guatemala, one of our most successful businesses. The transaction is right in line with our stated inorganic capital allocation strategy, which includes the acquisition of the remaining minority interests owned by third parties in our operations, when those transactions can be executed in an accretive manner.”

“We thank our partners for their important role developing Tigo Guatemala and for the support for this transaction. For Millicom, this new investment reflects our continued confidence in the thriving economy of Guatemala and our renewed commitment to the digital transformation of its society. Hand in hand with the vision and strong commitment of our team of more than 3,100 employees in the country, we will continue to build the digital highways that connect people, improve lives, and develop communities all throughout Guatemala,” Ramos added.

He finished by saying that: “With this transaction, we will transform the financial profile of Millicom, significantly increase our cash flow and net income and greatly simplify our structure.”
CT Bureau