Telefonica receives EUR530m offer for Guatemala, El Salvador units, report says

17 Jan 2019

Spanish telecoms giant Telefonica has received a EUR530 million (USD604 million) offer for its units in Guatemala and El Salvador, El Economista reports, citing sources familiar with the talks. Telefonica holds a 60% stake in each of the businesses, with Guatemala-based Corporacion Multi Inversiones (CMI) holding a 40% stake in each of the subsidiaries – a shareholder agreement which is replicated in Telefonica’s Nicaragua and Panama businesses.

Regional heavyweight America Movil (AM) is identified by the business daily as the ‘standout candidate’ for the takeover, although the deal has also piqued the interest of AT&T, Liberty Latin America (LLA) and Millicom International Cellular (MIC – itself a takeover target for LLA). A tie-up between Claro and Movistar – historically two of the largest operators in Central America – is likely to cause concern among competition watchdogs, however. Claro leads the Salvadoran market in subscriber terms and holds second position in Guatemala. Movistar occupies second place in El Salvador and ranks third in Guatemala (a market led by MIC-backed Tigo).

As previously reported by TeleGeography’s CommsUpdate, Telefonica has been considering the total or partial divestment of its Mexican and Central American subsidiaries since last Autumn. Telefonica Mexico is likely to be valued at between EUR1.1 billion and EUR1.9 billion, while the telco’s combined Central American units are valued at around EUR760 million. As well as the aforementioned Guatemala, El Salvador, Nicaragua and Panama businesses, the Spanish parent also owns the entirety of Telefonica de Costa Rica.

El Salvador, Guatemala,America Movil (AM), Telefonica, Telefonica Moviles El Salvador (Movistar), Telefonica Moviles Guatemala (Movistar),



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