Online sector partnership will cover Latin America and Africa

A new agreement will see the development of new online sector franchises for launch in Latin America and Africa. Millicom International Cellular has entered into a four-year partnership with Rocket Internet that gives it the option of acquiring controlling stakes in two of its partner’s subsidiaries - Latin America Internet Holding and Africa Internet Holding.

LIH and AIH develop and offer services through franchises operating in e-commerce, marketplaces, subscription, lead generation and payments. The two holding companies control 8 operating businesses with combined estimated revenues of around EUR35 million in 2012.

Both holdings are required to launch a number of new businesses in Latin America and Africa over the next 3 years. Accumulated start-up losses over the first three years of operation are expected to be below EUR250 million. Over time, Millicom aims to extend similar services to its existing markets.

Once the deal is concluded, Millicom will acquire a 20% stake in both LIH and AIH, through two reserved capital increases, with the option to increase its stakes up to 50% without management rights over 24 months.

Mikael Grahne, Millicom’s President and CEO, commented: “In the same way as we have brought affordable mobile telephony services to emerging markets customers, we will bring e-commerce and online services to people in Latin America and Africa. We believe that online services in emerging markets have the potential to go beyond the convenience they successfully brought in developed markets. Through online we will enable access to a much more diversified product offering than what is currently available in emerging markets.”

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