Telefónica Sells Ecuadorian Subsidiary to Millicom for $380 Million
The Spanish telecommunications giant shifts focus to its core markets amidst growing competition and debt.
Telefónica, the Spanish telecommunications company, announced on Saturday its decision to sell its Ecuadorian subsidiary, OTECEL S.A. (Telefónica Ecuador), to Millicom for $380 million.
This move is part of the company's strategy to reduce its footprint in Latin America and concentrate on its key markets.
In a statement made to the Spanish stock market regulator (CNMV), Telefónica Hispanoamérica, S.A., a wholly owned subsidiary of Telefónica, S.A., confirmed that it has reached an agreement with Millicom Spain, S.L. to sell all shares it holds in OTECEL S.A., which represents 100% of the company's capital.
The transaction is valued at $380 million (approximately €330 million at current exchange rates) and remains subject to the necessary regulatory approvals.
Telefónica noted that this sale aligns with its asset management strategy, aiming to reduce its exposure in the Hispanic American region.
The sale arrives amid Telefónica's strategic pivot towards its main markets: Spain, Germany, the United Kingdom, and Brazil.
The company has faced increasing competition and significant debt pressures, prompting it to divest from several subsidiaries across Latin America in recent years.
Previously, Telefónica has sold its holdings in Guatemala, Costa Rica, Colombia, and Uruguay.
In addition to the Ecuadorian deal, Telefónica announced in April the sale of its Peruvian subsidiary to Integra Tec International and, in February, the transfer of its Argentine subsidiary to Telecom Argentina, which is controlled by media group Clarín. On June 6, the Argentine judiciary approved this transaction, valued at $1.245 billion, despite opposition from the government of Javier Milei.
The communications regulatory body, Enacom, has yet to provide a ruling on this sale.
Telefónica's divestitures follow a tumultuous period for the company, highlighted by the unexpected acquisition of a 9.9% stake by Saudi Telecom Company (STC) in September 2023.
This move is part of the company's strategy to reduce its footprint in Latin America and concentrate on its key markets.
In a statement made to the Spanish stock market regulator (CNMV), Telefónica Hispanoamérica, S.A., a wholly owned subsidiary of Telefónica, S.A., confirmed that it has reached an agreement with Millicom Spain, S.L. to sell all shares it holds in OTECEL S.A., which represents 100% of the company's capital.
The transaction is valued at $380 million (approximately €330 million at current exchange rates) and remains subject to the necessary regulatory approvals.
Telefónica noted that this sale aligns with its asset management strategy, aiming to reduce its exposure in the Hispanic American region.
The sale arrives amid Telefónica's strategic pivot towards its main markets: Spain, Germany, the United Kingdom, and Brazil.
The company has faced increasing competition and significant debt pressures, prompting it to divest from several subsidiaries across Latin America in recent years.
Previously, Telefónica has sold its holdings in Guatemala, Costa Rica, Colombia, and Uruguay.
In addition to the Ecuadorian deal, Telefónica announced in April the sale of its Peruvian subsidiary to Integra Tec International and, in February, the transfer of its Argentine subsidiary to Telecom Argentina, which is controlled by media group Clarín. On June 6, the Argentine judiciary approved this transaction, valued at $1.245 billion, despite opposition from the government of Javier Milei.
The communications regulatory body, Enacom, has yet to provide a ruling on this sale.
Telefónica's divestitures follow a tumultuous period for the company, highlighted by the unexpected acquisition of a 9.9% stake by Saudi Telecom Company (STC) in September 2023.