Spanish multinational telecommunications company Telefonica has agreed to sell its stake in its Colombian unit to Millicom, a provider of fixed and mobile telecommunications services in Latin America, for US $400 million.
Statements released by both companies indicate that the Spanish unit of Luxembourg-headquartered telecom Millicom will buy the 67.5% stake in Telefonica Colombian.
This move has been expected for some time. Indeed, at the end of July 2024 we were among many outlets reporting that Telefonica had signed a non-binding agreement with Millicom to explore a possible deal.
The move is, according to Telefonica, part of a strategy to gradually reduce its exposure to Latin America. In fact Telefonica has already divested from many markets in Latin America, where returns were reportedly lower than capital cost, to focus on its businesses in Spain, Brazil, the UK and Germany.
Reuters reports that newly appointed Chief Executive Marc Murtra has said the company plans to complete a strategic review before the end of this year. Last month, Telefonica sold its unit in Argentina and earlier this month it was widely reported that the company had started the process to sell its units in Mexico and Peru.
It also has a presence in Chile, Ecuador, Uruguay and Venezuela. However, exiting Argentina, Mexico and Colombia significantly reduces its footprint in Latin America, where it has already divested units in El Salvador and Costa Rica.
