Millicom and NJJ complete purchase of Telefónica Chile

The joint venture acquired 100% of Telefónica in Chile, strengthening Millicom's long-term strategy in the region.

International service provider Millicom (Tigo) and French holding company NJJ completed their joint acquisition of Telefónica operations in Chile on Tuesday, marking a major shift in the local telecommunications market.

In the joint venture controlled by NJJ (51%), with Millicom as minority partner (49%), the two firms completed their purchase of 99.4% of Telefónica Chile's assets.

The transaction included an upfront payment of US$50 million and additional payments of up to US$150 million, conditional on value creation, as well as a contribution from Telefónica to ensure the stability of the subsidiary’s balance sheet during closure of the deal.

Regional strategy and competitive challenges

The transaction strengthens the presence of Millicom—a Luxembourg-based company that operates the Tigo brand in several Latin American countries—in a highly competitive market with robust demand for mobile and Internet services.

"This transaction reflects Millicom's disciplined, pragmatic focus on long-term value creation in Latin America," commented the firm’s CEO, Marcelo Benitez, in the official statement, underlining the company's strategy of growing sustainably without compromising financial solvency.

Unlike Telefónica's divestment processes elsewhere in the region—in Colombia, Ecuador and Uruguay, for example, where the company has reduced its presence to focus more on strategic European markets—this sale marks the Spanish company's exit from the Chilean mobile business entirely.

For Millicom, the sale agreement offers an opportunity to apply its operating model from day one, to capture synergies in networks, coverage and digital services while enjoying contractual options to expand its share in the coming years.

Although the business will not be immediately consolidated in Millicom's financial statements, the transaction offers the group financial flexibility and a position in a market that will require ongoing technological innovations ranging from 5G to fiber optic expansion.

Source: Radio ADN.