Millicom backs out of $570 mln deal for Telefonica's Costa Rica unit (updated)
02/05/2020 20:06
(Adds Telefonica no comment, Costa Rica paper report)
By Nathan Allen
MADRID, May 2 (Reuters) - Millicom International Cellular
TIGOsdb.ST said on Saturday it would back out of a $570
million deal to buy Telefonica's TEF.MC Costa Rican business,
creating a headache for the Spanish company as it looks to
sharpen its focus on core markets in Europe and Brazil.
Luxembourg-based Millicom said Telefonica had failed to
secure regulatory approvals needed for the sale to go ahead by
May 1, granting it the right to pull out.
Millicom, which gave no reason for its decision to exit the
deal, did not specify which approvals were still pending but
said it would vigorously defend any legal action brought by
Telefonica.
Telefonica declined to comment on Millicom's decision.
Earlier in the week, Telefonica had said all the conditions
needed for closing the deal had been met and it would sue
Millicom if it failed to honour the deal.
Costa Rican business newspaper El Financiero quoted the
government as saying it had given the necessary authorizations.
The Costa Rica unit formed part of a broader package of
Central American operations also including those in Panama and
Nicaragua which Telefonica agreed to sell to Millicom in
February 2019 for $1.65 billion. The other elements of the sale
are unaffected by the Costa Rican decision. urn:newsml:reuters.com:*:nL1N20F23W
Telefonica last November announced a turnaround plan to
bring in 2 billion euros ($2.2 billion) a year in extra revenue
by hiving off more of its Latin American businesses and focusing
on its core markets of Spain, the United Kingdom, Brazil and
Germany.
Reuters on Friday reported that Telefonica was exploring a
merger of its British mobile business O2 with Liberty Global's
Virgin Media cable network. urn:newsml:reuters.com:*:nL4N2CJ2NE
($1 = 0.9105 euros)
(Reporting by Nathan Allen
Additional reporting by Ismail Shakil
Editing by James Drummond and David Holmes)
((Nathan.Allen@thomsonreuters.com;))