Millicom Shows Interest in Buying Telefonica’s Chile Unit
(Bloomberg) — Millicom International Cellular SA has signaled interest in bidding for Telefonica SA’s Chilean unit to begin operating in the country, according to people familiar with the matter.
The sources, who requested anonymity because the talks are private, said that a final decision has not been made and there is no certainty that Millicom will make a final offer for Telefonica Chile. The deal will bring a new competitor to the Chilean market and keep the total number at four.
Millicom, which has been operating under the Tigo brand in Latin America for decades, acquired Telefonica’s assets in other parts of the region as the Madrid-based company reduced its presence outside Brazil. Last year, Luxembourg-based Millicom agreed to acquire Telefonica’s Colombia, Ecuador and Uruguay units.
Millicom declined to comment. Telefonica had no comment on the matter.
Telefonica has been seeking bids for its Chilean unit since last year and had previously attracted interest from rivals Entel SA and America Movil SAB, but they abandoned plans for a joint bid. While Entel said in December it was exploring options to remain in the bidding process, America Movil said it would try to go it alone.
According to one of the sources, Entel has not yet made a new offer. The aborted joint bid by America Movil and Entel was seen as the leading bid and would have brought consolidation to a market where operators had suffered financial losses, in one case resulting in bankruptcy proceedings. Investors welcomed the idea of reducing the number of competitors in the market.
On the other hand, antitrust regulators may be keen to maintain a competitive field, and Millicom’s bid could keep the number of major carriers steady. The Movistar brand, which Telefonica uses for mobile services in Chile, had 22.6% of the market as of September, ranking second after Entel, according to the regulator’s latest data.
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