Last month Liberty Latin America (LLA)–a new player formed in 2017 following a split-off from Liberty Global–launched a surprise $7.6 billion takeover bid for LatAm-focused Millicom International Cellular (MIC). LLA was clearly looking to create a regional telecom giant with operations spanning South America, Central America, and the Caribbean.
After a week of negotiations, the merger talks were abruptly cancelled. MIC’s management was reportedly unconvinced of the merits of the half-cash, half-stock deal.
The rejection has forced LLA, which currently operates in more than 20 markets across Latin America and the Caribbean, to turn its attentions elsewhere.
Today we’re exploring some of the logical takeover targets.
Since December 2018 negotiations have been “at an advanced stage” between LLA and the government of Curacao on a proposed acquisition of United Telecommunication Services. This is according to sources within the Curacao-based telco, although a non-disclosure agreement means that information is scarce.
Whether or not UTS’ other island branches are included in negotiations has not been disclosed. These units include mobile operations in Sint Maarten (UTS Sint Maarten), Bonaire (Chippie Bonaire), Saint-Martin and Saint Barthelemy (UTS Caraibe), Sint Eustatius (Chippie St Eustatius), and Saba (Chippie Saba).
Spanish telecom giant Telefonica is in the process of divesting its entire Central American portfolio, a process kick-started with the sale of its businesses in Guatemala and El Salvador to regional rival America Movil for a total of $648 million in January 2019.
Discussions over the units in Nicaragua, Costa Rica, and Panama are still ongoing.
LLA’s $250 million acquisition of an 80 percent stake in Costa Rican cableco Cabletica in October 2018–the group’s first takeover of note–signaled its intention to increase its focus on Central America and a deal with Telefonica remains a strong possibility.
LLA’s $250 million acquisition of an 80 percent stake in Costa Rican cableco Cabletica in October 2018–the group’s first takeover of note–signaled its intention to increase its focus on Central America and a deal with Telefonica remains a strong possibility.
In Panama, meanwhile, the government is attempting to make better use of its spectrum resources by reducing the number of active mobile players from four to three.
First tabled in April 2017, Law No. 479 remains under discussion. A tie-up between LLA-backed Cable & Wireless Panama and Telefonica Moviles Panama (Movistar) would solve the government’s four-to-three quandary.
Interestingly, Millicom has been named as the front-runner for the acquisition of Telefonica’s businesses in Nicaragua, Panama, and Costa Rica, but LLA may yet scupper its plans and take the fight to its one-time takeover target.
In November 2017 Altice Europe was linked with a EUR3 billion ($3.7 billion) sale of its Dominican Republic unit, Altice Dominicana.
The divestment–part of the group’s strategy to trim its EUR51 billion debt mountain–was reported just days after Altice completed the operational merger of its Orange Dominicana and Tricom business units, creating Altice Dominicana.
Despite reported interest from private equity firms, large investment funds, and a local family, no sale has materialized.
Instead, in July 2018 Altice reached an agreement with Phoenix Tower International for the sale of 100 percent in the tower company Teletorres del Caribe. The sale covers 1,049 sites currently operated by Altice Dominicana.
The transaction valued Teletorres del Caribe at an enterprise value of $170 million.
Nevertheless, the full-service telco remains an attractive takeover proposition to anyone looking to expand within the Caribbean.
ATN International (ANTI), renamed from Atlantic Tele-Network in June 2016, was founded in 1987 and headquartered in Massachusetts where it began as a rural local exchange carrier. This was before expanding wireless services to various parts of the U.S. and establishing subsidiaries in the Caribbean and South America.
Indeed, ATNI’s International Telecom division–which comprises GTT (Guyana), One Communications (Bermuda), Logic Communications (Cayman Islands), and Viya (U.S. Virgin Islands)–offers interested parties an opportunity to get a toehold in a number of disparate markets.
ATNI is unlikely to be immune to a sale if the price is right; in January 2013 it agreed to sell its main U.S. cellular division, Alltel Wireless, to AT&T for $780 million.
ATNI is unlikely to be immune to a sale if the price is right; in January 2013 it agreed to sell its main U.S. cellular division, Alltel Wireless, to AT&T for $780 million.
Further down the scale is Green Dot, an ISP/pay-TV provider based in Trinidad and Tobago that is active in its domestic market, as well as in Grenada and Suriname.
The company changed hands in February 2017 when One Caribbean Media, a publicly-owned media company listed on the stock exchanges in Trinidad and Tobago and Barbados, sealed its acquisition of a 51 percent stake. LLA is already operational in Trinidad and Grenada, and, as such, any potential deal could represent a decent bolt-on acquisition.