Millicom to buy Panama's Cable Onda in $1bn deal
Millicom has struck a $1 billion deal to buy an 80% stake in Panama cable and fixed services operator Cable Onda.
The transaction values 100% of Cable Onda – Panama’s largest fixed and cable operator - at a value of $1,460 million and is expected to close by the end of the year.
It will see Millicom buy a pay-TV, broadband, fixed telephony and B2B provider in Panama with more than 500,000 customers and an advanced cable network. It marks the firm’s entrance into Panama, one of Latin America’s fastest growing telecoms market. Notably, a substantial amount of this growth has been in the mobile market which has flourished in recent years.
Mauricio Ramos, CEO of Millicom, said: "Our acquisition of Cable Onda is consistent with our strategy of accelerating the deployment of high-speed data networks in Central and South America. With the addition of Panama, we now have contiguous country operations from Guatemala to Colombia, which will significantly enhance our B2B capabilities, given the country's increasingly important role as a business hub for the region.
“We are excited about expanding to Panama, an investment grade country with a diversified, dollarized, and robust economy. Disposable income levels in Panama are now among the highest in Latin America, yet penetration rates for digital services remain comparatively low. We look forward to working with our strong local partners to extend the company's market leadership and bring Digital Lifestyle services to even more Panamanians and contribute to the ongoing socio-economic development of the country."
Millicom said it will fund the investment using existing cash resources, along with new debt which will be secured from an unnamed group of banks.
As part of the transaction, Millicom and the selling shareholders have entered into a shareholder agreement which, among other items, grants to Millicom the right to acquire and to the selling shareholders the right to sell, the remaining 20% of Cable Onda's equity.
Nicolas Gonzalez Revilla, CEO of Cable Onda, added: "For the past two decades, the dedicated employees of Cable Onda have built a world-class organization capable of competing, and winning, against some of the largest telecom service providers in the world.
“This is a true Panamanian success story that we can all be proud of, and this is also something that we have in common with Millicom, the clear leader in most of its markets. We are excited to partner with Millicom for this next step in Cable Onda's journey."