Millicom (Tigo) acquires Telefonica operations in Chile jointly with NJJ, structured to capture strategic value while protecting its balance sheet

Core Viewpoint - Millicom, in partnership with NJJ, has acquired Telefonica's operations in Chile, structured to enhance strategic value while safeguarding its balance sheet [1][4]. Acquisition Structure - The acquisition is a joint venture with Millicom holding 49% and NJJ holding 51% [1][4]. - An initial payment of $50 million will be made to Telefonica, with potential additional earn-out payments up to $150 million based on structural value creation [1][5]. - The acquired business will not be consolidated into Millicom's financial statements during the joint ownership, and its financial obligations are non-recourse to Millicom [2][5]. Financial Stability - Telefonica is required to contribute CLP 79 billion (approximately USD 92 million) at closing to ensure balance sheet stability [2][7]. - The structure allows Millicom to maintain financial flexibility while capturing long-term strategic presence in South America [7][11]. Strategic Rationale - Millicom will operate the business from day one, applying its operational expertise to stabilize and strengthen the asset [8]. - The partnership aims to enhance competitiveness, operational efficiency, and support sustained investment in network quality and digital services in Chile [9][10]. - The acquisition is seen as an opportunity to reposition a challenged asset in a significant market at an attractive valuation [9][10]. Future Options - Millicom has the option to acquire NJJ's stake in the business in Year 5 and 6 post-closing at a 10% discount to Millicom's trading multiples [3][6]. - If Millicom does not exercise its option, NJJ can acquire Millicom's 49% stake under similar pricing terms [6].