Millicom & EPM in exclusive negotiations for a potential combination of their telecom businesses in Colombia
| Source:Millicom International Cellular S.A.
Stockholm, February 5, 2013 – Millicom International Cellular S.A. (“Millicom”)
(Stockholmsbörsen: MIC) announces today that it has entered into exclusive
negotiations with EPM regarding the possible combination of their Colombian
EPM (Empresas Públicas de Medellín) is an industrial and commercial conglomerate
owned by the municipality of Medellín. It is the largest shareholder of UNE EPM
Telecomunicaciones (‘UNE’) which provides cable TV and fixed telephony services
across the region encompassing Medellín, the second largest city in Colombia.
UNE owns 25% of Colombia Móvil (‘Tigo Colombia’), in which Millicom owns 50% and
The purpose of the negotiation is to evaluate the possibility of a merger
between the holding company that owns 50% of Colombia Móvil- Tigo- and UNE EPM
to create a leading integrated telecommunication operator in Colombia.
Millicom and EPM have partnered successfully for the past six years as we
jointly own Tigo Colombia together with ETB (Empresa de Telecomunicaciones de
Bogotá) from Bogotá. More recently, UNE has started offering mobile services, in
part through a roaming agreement with Tigo Colombia. The market dynamics for
fixed and mobile integration create potential to offer best quality services to
customers, notably digital services. As a consequence, both parties agree that
it is the right time to consider integration of the businesses, with a
shareholders’ agreement similar to what has been successfully governing the
relationship over the past six years.
Hans-Holger Albrecht, President and CEO for Millicom, commented:
“We are pleased to have reached an advanced stage in our discussions with EPM.
It underlines a few key principles we are working with at Millicom:
Millicom values its successful partnership with EPM. The combination of a strong
local partner with the international expertise of Millicom has provided a solid
model in the past and will be even more important for the future. It is a
trustful and good working relationship.
Secondly, Millicom strongly believes in a customer centric approach; to offer
customers the best digital services on all devices and from all locations. The
strong combination of mobile and fixed businesses will allow us to move even
faster in this direction to the benefit of our customers. We will be able to
offer the most entertaining and most innovative products in the future.
And finally, we will be investing into a country we know very well which is
growing at a fast rate.
So all in all, it is a compelling opportunity that we want to pursue further to
enhance shareholder value.”
Juan Esteban Calle, CEO of EPM, further added:
“We are optimistic about the conversations with Millicom. It is our fiduciary
duty to explore alternatives that will lead UNE EPM to improve its competitive
position in the telecommunications industry, a sector we consider strategic for
the competitiveness of Medellin, Antioquia and Colombia. We believe that our
markets and strengths are naturally complementary and there is a fit in
corporate values such as transparency, social responsibility and customer
A stronger position in the telecommunications market would accelerate the
implementation of our strategy to become the partners of choice of all Colombian
regions in their quest for better services for their citizens and more developed
and equitable territories.”
UNE and Tigo Colombia product portfolios and geographic presences are very
complementary. The contemplated transaction would be a merger of equals and
would be subject to regulatory approval. Under the terms provisionally discussed
between the two parties, Millicom and EPM would contribute their respective
telecommunication businesses in Colombia into a newly created entity. Should an
agreement be reached, Millicom does not anticipate that its consolidated Net
Debt to EBITDA ratio will exceed 1.5x (post-transaction).
The discussions are expected to conclude during the first half of 2013.
For further information, please visit www.millicom.com or contact:
President and Chief Executive Officer
Tel: 46 8 562 000 12
Tel: 352 27 759 479
Millicom is a leading telecom operator dedicated to emerging markets in Latin
America and Africa. Millicom sets the pace when it comes to providing digital
lifestyle services to the world’s emerging markets, giving access to the world,
primarily through mobile devices. Operating in 15 countries, Millicom offers
innovative and customer-centric products. The Millicom Group employs more than
8,000 people and provides mobile services, access to the internet, content and
financial services to over 45 million customers. Founded in 1990, Millicom
International Cellular SA is headquartered in Luxembourg and listed on NASDAQ
OMX Stockholm under the symbol MIC. In 2011, Millicom generated revenue of USD
4.53 billion and EBITDA of USD 2.09 billion.
EPM is the holding company of a group of 41 companies employing around 13,000
people and participating in generation, distribution and commercialization of
electricity, gas distribution, water distribution, sanitation and
telecommunications in Colombia and Central America. Founded in 1955, EPM is the
second largest company in Colombia by assets. In 2011 EPM generated consolidated
revenue of US$ 6.01 billion and operating profit (EBITDA) of US$ 1.87 billion.
Its affiliate UNE EPM telecommunications S.A., which operates under the name of
UNE, controls six other companies in various cities around Colombia. It provides
local telephone, internet and HDTV and owns 25% of Colombia Movil –TIGO-. EPM is
fully owned by the municipality of Medellin and it applies the highest
international quality standards to the services it provides. The company has
been recognized in Colombia as a leader in social responsibility and
transparency. For more information please visit: www.epm.com.co
This press release contains “forward-looking statements”, which are statements
that are not historical facts, including statements concerning the parties'
ability to complete the proposed transaction; the anticipated timing of the
proposed transaction; the expected benefits and costs of the proposed
transaction; management plans relating to the proposed transaction; any
statements of operations, including the execution of integration plans; any
statements of expectation or belief; and any statements of assumptions
underlying any of the foregoing. Any statement in this announcement that
expresses or implies any party's intentions, beliefs, expectations or
predictions (and the assumptions underlying them) is a forward-looking
statement. Forward-looking statements involve inherent risks, uncertainties and
assumptions which could cause actual results to differ materially from those
expressed or implied by such forward-looking statements and assumptions. The
forward-looking statements contained in this announcement are made as of the
date hereof, and each party expressly disclaims any obligation to update or
correct any forward-looking statements made herein due to the occurrence of
events after the issuance of this announcement. This announcement is for
informational purposes only and is not an offer to sell or the solicitation of
an offer to buy any securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful.
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