Millicom cancels Telefonica’s operations acquisition agreement in Costa Rica

Millicom officially reported last May 2nd its decision to cancel Telefonica’s operations acquisition agreement in Costa Rica, valued at USD 570 million and reached on February 20th, 2019. The company justified its determination supporting that, according to the agreement ran with Telefonica, in case of finding pending issues on the required regulatory conditions, as of May 1st, either company could terminate the agreement. In the communication, Millicom does not detail the pending matters that prevent the transaction from being completed.

Last week, Telefonica reported that it will file a lawsuit against Millicom in New York for not fulfilling the terms of the agreement, with the aim of proceeding as agreed in it and that the company be compensated for the damages that Millicom’s decision could cause it. Likewise, as Millicom reported when the lawsuit to be initiated by Telefonica was known, the company, whose operations in Latin America are known under the ‘Tigo’ brand, met all the guidelines agreed in the contract. At the end of August 2019, the Costa Rican Telecommunications Superintendence (Sutel) approved the sale of Telefonica’s operations by Millicom in the country, because, according to the regulator, ‘there are no indications of the existence of potential anti-competitive effects’ in it.

Telefonica had announced in February 2019 the agreement with Millicom to acquire its operations in Costa Rica, Nicaragua and Panama. As reported by the National Securities Market Commission (CNMV), the full agreement was valued at USD 1,650 million, of which USD 570 million belong to the acquisition of Telefonica in Costa Rica; USD 650 million to Telefonica Panama, and USD 430 million to Telefonica Nicaragua.